Sunday 4 May 2014

What is Bank Guarantee?

Bank Guarantee is a document issued by bank to the person on whose behalf the bank stands as guarantee. This document is commonly used in the corporate world. Especially in International Transactions, Bank Guarantee has a very positive role.

What happens in Bank Guarantee usually is that bank makes sure that the person on whose behalf its giving guarantee has a worth more than the amount mentioned in such guarantee. Usually banks take cash amounts from that person or mortgages his her property as surety.

A common trend is that Bank Guarantees are exchanged in international transactions against the goods purchased. That brings confidence on the part of seller that he/she will be get paid eventually by the purchaser. Similarly the purchaser knows that he/she will get the product for sure as per the settled terms.

If you are facing any legal complications regarding the bank guarantee, do write us at internationallawyerinfo@gmail.com

Regards,
International Lawyer
Team
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Salman Yousaf Khan
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