Today, for the heck of it, I investigated the difference between guaranty and guarantee.
Here’s what Bryan Garner says in A Dictionary of Modern Legal Usage (1995):
The distinction in BrE once was that the former [guarantee] is the verb, the latter [guaranty] the noun. Yet guarantee is now commonly used as both n. & v.t. in both AmE and BrE. … .
In practice, guarantee, n., is the usual term, seen often, for example, in the context of consumer warranties or other assurances of quality or performance. Guaranty, in contrast, is now used primarily in financial and banking contexts in the sense “a promise to answer for the debt of another.” Guaranty is now rarely seen in nonlegal writing, whether in G.B. or in the U.S. Some legal writers prefer guaranty in all nominal senses.
Guaranty was formerly used as a verb but is now obsolete as a variant of guarantee, v.t.
That seems straightforward enough, but Bryan goes on to refer to the “more modern legal use” of guaranty as a noun in the following example: “Footnote 10 indicates that Congress is without power to undercut the equal-protection guaranty of racial equality in the guise of implementing the Fourteenth Amendment.” I’m not sure how that relates to his statement that it’s now used primarily in finance and banking.
The New Fowler’s Modern English Usage (R. W. Burchfield ed., 3d ed. 1996) offers what appears to be a simple rule:
Guarantee, guaranty. “Fears of choosing the wrong one of these two forms are natural, but needless. As things now are, -ee is never wrong where either is possible” (Fowler, 1926). The advice is still sound.
But this raises the question, When is either possible, as opposed to just one or the other?
For what it’s worth, here’s some empirical evidence on use of guaranty and guarantee as nouns: In the past year, guaranty and its plural guaranties were used in all capitals in 2,809 contracts filed on the SEC’s EDGAR system. By contrast, in the past year guarantee and guarantees were used in all capitals in 2,083 contracts filed on EDGAR. For the most part, these words are used in all capitals only in titles, headings, and disclaimers, and it’s safe to assume that in these contexts they’re used as nouns. (I structured the searches this way so as not to retrieve these words used as verbs.) These results indicate that overall, among U.S. corporate lawyers there’s a pretty even split between guaranty and guarantee used as nouns.
When I ran the same searches but added to the search term credit agreement in all capitals, I got 788 hits for guaranty and guaranties and 279 hits for guarantee and guarantees. This suggests that in the context of finance, guaranty is indeed the preferred form of the noun.
But even in this context guarantee the noun was used a quarter of the time, so in the interest of simplicity I’m inclined to use in all contexts guarantee as both noun and verb. To insist on a distinction between the noun forms guaranty and guarantee is to invite continued confusion.