Letter of Guarantee--L/G
Letter of Guarantee(L / G ) also known as the guarantee, it refers to banks, insurance companies, guarantee companies or individuals should be the applicant's request, to third parties opened a credit guarantee in writing credentials. Ensure that the applicant failed to discharge its responsibility by mutual agreement or obligation, by the Guarantor to fulfill a certain amount on its behalf, a certain period of time within the scope of liability to pay or financial liability.
Guarantee - the role of Raising the amount of advance payment guarantee to ensure meaningful agreement between the applicant has failed to fulfill its responsibility or obligation, by the Guarantor to fulfill a certain amount on its behalf, a certain period of time within the scope of liability to pay or financial liability. Bond shall guarantee, for convenience, shipping companies and banks have a certain format are printed guarantee.
With guarantees of its role includes the delivery of the goods that, with bond issuing clean bills of lading that with the advances of a bill of lading, etc. backdating guarantee. With guarantee delivery of the goods in the circumstances, the consignee to ensure the receipt of bill of lading public ie shipping companies to return a full set of original bills of lading, the consignee shall bear the freight and other costs paid by the responsibilities and failing to submit the bill of lading and the delivery of the goods produced are responsible for all losses and show the content for the guarantee by the bank jointly and severally liable, together with the consignee. With bond issue was to make the bill of lading the shipper can clean bill of lading, shipping bill of lading has been successful settlement. With regard to guarantee the legal effect of the Hague Visby Rules are rules and there is no provision, taking into account bond in the shipping business, the practical significance and the need to protect innocent third parties, the Hamburg Rules, for the first time the effect on the bond issue a clear requirement guarantees that the agreement between the carrier and the shipper shall not be against a third party, the bond between the carrier and the shipper, but in the absence of intent to deceive a third party only in force; if found intent to deceive the first three, then the carrier shall not benefit from the compensation limitation of liability when a third party, and the guarantee of no effect.
Guarantee - parties and their rights and responsibilities
Payment Guarantee
1, the principal (Principal), is a bank or insurance company for opening a guarantee person. Principal duties and responsibilities are
(1) In the Guarantor in accordance with the provisions of guarantee payment to the beneficiary immediately after the guarantor to repay the amount due.
(2) The guarantee under the burden of all costs and interest.
(3) The sponsor if deemed necessary, should be an advance of some or all of the deposit.
2, the guarantor (Guarantor), is a guarantee of open Liren. Guarantor of rights and responsibilities are:
(1) In an interview with the client application, according to the instructions of the principal opened guarantee to the beneficiaries.
(2) bond is incumbent upon opening a letter of guarantee commitments in accordance with the conditions reasonable and prudent manner, including submission of audited statement of claim, including all documents, to pay the beneficiary.
(3) guarantee repayment of the principal is not immediately paid the section line of cases, the right to dispose of deposit, collateral, collateral. If the later, less than a cover, then the secured line of the right to recourse under part of the client.
3, the beneficiary (Beneficiary), is entitled to the provisions of Letter of Guarantee issued by a notice or demand for payment, together with other documents, to obtain a guarantor money people. Rights of the beneficiaries are: According to the guarantee provisions, guarantees consistent with valid payment claim submitted statements, or in conjunction with relevant documents, to the guarantor to demand payment, and get paid .
1, guarantees and standby letters of credit similar to the Office
(A) of the definition and the basic similarities between the legal parties Guarantees and standby letters of credit, although the specific expressions of the definition is different, but in general, they are by a bank or other strong non-bank financial institutions under the contract of a transaction party (applicant ) at the request or direction, to the transaction the other party (beneficiary) a legislature of the written document, submitted on the surface commitment to comply with its provisions on a written statement of claim or other document to be paid. Guarantees and standby letters of credit is basically the same legal person, generally including the applicant, a guarantor or the Issuing Bank (both in the same position), the beneficiary. The legal relationship between the three is that the applicant and the guarantor or the Issuing Bank, but between the contractual relationship between rights and obligations between the two is to open applications or guarantee the Issuing Bank and the beneficiary the legal relations is based on guarantees or standby letters of credit shall prevail.
(B) The application of the common Guarantees and standby letters of credit and guarantees for International Settlements are an important form of international economic and trade exchanges can play the same role, to achieve the same purpose. In the international economic and trade exchanges, the trading parties often require a variety of guarantees to ensure that the discharge of debts, such as the tender transactions tender security, performance guarantees, equipment, trade in advance repayment guarantee, quality or maintenance guarantee, the international technology trade of payment guarantees, these guarantees by guarantee or standby letter of credit can be realized in the form. From the standby letter of credit generation to see that it is as an alternative to bond generated, therefore, to achieve its natural and guarantees are coincide. Development of the practice is true.
(C) the nature of the common International trade practice, mostly in the Letter of Guarantee for Demand Guarantees, which absorbed the characteristics of the letter of credit, more and more closer to the letter of credit, so that for Demand Guarantees and standby letters of credit is becoming more similar in nature. Manifested as follows: First, the guarantor bank or issuing bank guarantees or payments are the primary responsibility, although the guarantee or standby letter of credit from the purposes is to play a security role, that is, when the applicant does not discharge the debt when the beneficiaries present their letter of guarantee or standby letter of credit to obtain compensation, while the applicant fulfilled its debts, the beneficiaries would not be necessary to use (standby letter of credit is the case, named after); second, although they are based on the applicant and the the basis of the beneficiary entered into a contract opened, but once opened, are independent of the underlying contract; third, they are purely documentary transactions, the guarantor or the Issuing Bank claims on the beneficiaries is based on the guarantee or stand-by credit permit the terms and provisions of the documents, that is, only vouchers for payment. Therefore, some people bond known as the "guarantee letter of credit."
2, guarantees and standby letters of credit differ
(A) guarantee a guarantee from the property and the independence of the sub-guarantee, standby letters of credit there is no such distinction between Guarantee people's security as a kind of virtue with which it contracts for the opening of the basis of the relationship between the property or be independent from the relationship? Accordingly, the bond in nature and independence of the bond guarantee from the property divided. From the properties of a traditional bond, the bond is the basis for the contract a subsidiary contract, the legal effect of the existence of a contract with the foundation, change, loss, the responsibility of the guarantor of the payment obligations are secondary only when the security Applicants letter breach of contract, breach of contract and does not bear the responsibility to ensure that people bear the responsibility for breach of contract to ensure that people assume the liability under the guarantee.
The applicant whether the breach of contract, is the basis of the contract according to the provisions, as well as actual performance to make judgments, but this judge is obviously not simple, however, often can be resolved through arbitration or litigation in which the merits. So when the Letter of Guarantee from the property under the claim occurred, the guarantor according to the terms of the underlying contract as well as actual performance to determine whether or not to pay. States used for domestic transactions is essentially dependent nature of bond guarantee. Independence of the bond is different, even though it is based on a contract basis for the opening, but once opened, it has an independent effect, is self-contained document, the guarantor of the subject to the payment of claims of lifts, and only pursuant to guarantee their own terms. Guarantee the independence of the general should have a clear responsibility of a guarantor is irrevocable, unconditional and see the cable on demand. Guarantee Once out, without the beneficiaries consent, can not modify or discharge their commitments under the guarantee obligations; bond depends only on payment under the guarantee itself, rather than on bond transactions outside the the bank claims the beneficiary received immediately after the amount required to be paid. Demand guarantee is a typical representative of the independence of bond.
Guarantee the independence after World War II to meet the needs of the development of contemporary international trade by the development of banking and business practices set up gradually and become the mainstream and trend of international security, the main reason is: First, from the properties of bond's claim occurred, the secured banks are required to investigate the true performance-based contracts, which is its personnel and professional and technical capacity can not reach, and will therefore be involved in the contract disputes or even litigation. Banks for their own interests, not willing to become embroiled in a complex contract dispute, so that the interests of banks and credibility were damaged, while the tendency to use the independence of the bond. And the bank guarantee in dealing with business, are increasingly the introduction of the letter of credit business management principles, and even some of the bond is called, but security letter of credit.
Second, the independence can guarantee the interests of the beneficiaries of more secure and more easy to implement, can avoid the applicant to guarantee a variety of reasons, such as force majeure, contract performance impossible, and so to resist the request of its claim to avoid default Prosecution of persons who spent a lot of money, effort, and defects such as protracted litigation can ensure that their rights are not to be compromised because of contract disputes. Standby letters of credit as a form of letter of credit, there is no distinction and independence from the property, which has the letter of credit's "independence, self-sufficiency, pure transaction documents," the characteristics of the beneficiary of the letter of credit subject to the issuing Bank letter of credit only in accordance with the terms and conditions to decide whether to pay, and has nothing to do with the basis of the contract.
