In the case of AAR, the Seventh Circuit, predicting Illinois law, decided that a guarantor of a secured debt may not waive the right to a commercially reasonable disposition of collateral upon the debtor's default. Any "absolute, unconditional" guaranty of payment that could be interpreted as a waiver of commercial reasonableness is unenforceable.
Financial institutions and other creditors routinely secure their debt in part by ?absolute and unconditional? third-party guarantees. In these guarantees the guarantor typically waives various defenses, including any defense based on a claimed impairment of collateral.