Q: What are the important features of bank guarantee?

Ans: A contract of bank guarantee involves the following important features:

1. Underlying contract between the applicant (i.e., debtor) and the beneficiary i.e., the creditor.
2. Maximum amount can be claimed under the Bank Guarantee.
3. Period of validity of bank guarantee.
4. Period within which the claim must be made by the beneficiary.
x

Comments

Post a Comment

Popular posts from this blog

Q: What is performance bank guarantee?

Ans: Performance bank guarantee was given against defects, unfinished and unsupplied items. In case of non performance by the contractor,  performance bank guarantee is invoked. A performance guarantee provides an assurance of compensation in the event of inadequate or delayed performance on a contract.
Read more

Q: Elaborate foreign bank guarantee ?

Ans: A foreign bank guarantee is provided by a bank on behalf of a borrower. This will be offered on behalf of the foreign beneficiary or creditor.  If the business is concerned with an export and import, the bank guarantee will be foreign bank guarantee. x
Read more

Q: Write about the citation of Himadri Chemicals Industries Ltd vs Coal Tar Refining Company on 7 August, 2007 ?

Ans:  Himadri Chemicals Industries Ltd vs Coal Tar Refining Company on 7 August, 2007 The Supreme Court in HIMADRI CHEMICALS INDUSTRIES LTD VERSUS COAL TAR REFINING COMPANY [2007 (8) TMI 704 - SUPREME COURT] lays down the following principles in the matter of injunction to restrain the encashment of bank guarantee as below:  While dealing with an application for injunction in the course of commercial dealings, and when an unconditional bank guarantee or letter of credit is given or accepted, the beneficiary is entitled to realize such a bank guarantee or a letter of credit in terms thereof irrespective of any pending disputes relating to the terms of the contract. The bank giving such guarantee is bound to honor it as per its terms irrespective of any dispute raised by its customer. The courts should be slow in granting an order of injunction to restrain the realization of a bank guarantee or a letter of credit.  Since a bank guarantee or letter of credit is an independen...
Read more