Demand of Bank Guarantees

Abstract

AbstractIndependent bank guarantee has been utilized since decades ago and isextensively common in internal relations. Independent bank guarantee, unlikeletter of credit, has a guarantee nature. therefore, in most cases, it would beexpired without any demand for payment. However, when the beneficiarydecides to demand for the payment, the effects of the guarantee will be appearedmore considerably. When there is a legal demand for the payment, the bankshould pay the amount of the document. Understanding the rules governing thelegal demand will lead the bank to avoid the payment, in cases where therequirements are not met. Also, it would enable the beneficiary to protect hisrights through a legal demand. The present essay deals with details of a legaldemand according to Iranian and French law, and with regard to internationaluniform rules on this matter.

Keywords

• keywords: bank guarantee
• principle of independence
• demand
• the validity period of the guarantee