Demand Guarantee check0 / 1 answered · 0 correct
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What does the guarantor mainly examine under an independent demand guarantee?
What is a Demand Guarantee?
Understand the independent bank undertaking behind many bank guarantees.
The simple meaning
A demand guarantee is a written undertaking under which a guarantor may have to pay when the beneficiary makes a demand that complies with the guarantee terms.
It usually supports an obligation in an underlying contract, but an independent demand guarantee is separate from that contract.
Why businesses use it
A buyer, employer or project owner may want security that the other party will perform, repay an advance or meet another agreed obligation.
A guarantee gives the beneficiary a bank or other guarantor undertaking instead of relying only on the applicant.
Demand guarantee is not the same as a surety
An independent demand guarantee is normally documentary: the guarantor examines the demand and stated documents rather than deciding the entire underlying dispute.
Local law and wording still matter, so the label “bank guarantee” alone is not enough to classify every undertaking.
Remember thisA demand guarantee supports an underlying obligation, but the independent guarantee is its own undertaking.
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