Bonds & Guarantees
A demand guarantee may be defined as a signed undertaking, however named or described, providing for payment on presentation of a complying demand.
The majority of demand guarantees are payable on first written demand without any additional documents. However it is not uncommon for the demand to be accompanied by a statement of breach of contractual agreement.
Demand guarantees can be made subject to the Uniform Rules for Demand Guarantees (2010) International Chamber of Commerce, Publication 758 and would subject to the governing law in the country of the issuer or as stipulated in the text of the guarantee.
Typical uses for demand guarantees include construction contracts and contracts for the international sale of goods.
Whereas the letter of credit is used to ensure that the supplier is paid and thus an instrument of payment, demand guarantees are intended to safeguard the buyer against non-performance which would make them an instrument of default.
This service is combined with personal assistance in the vetting of texts of guarantees and counter-guarantees. We can also provide you with an expert opinions on the routing/custom of guarantees in specific markets. In addition we can offer trade structures and solutions revolving around guarantees.
For further details, call our Trade Finance team on +356 21322100 or send us an email.