Commercial law. Bank guarantee (most important)

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Commercial law. Bank guarantee (most important)

Lecture notes, cheat sheets

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58. BANK GUARANTEE

By virtue of bank guarantee (Article 368-379 of the Civil Code), a bank, other credit institution or an insurance organization (guarantor) give, at the request of another person (principal), a written obligation to pay the principal’s creditor (beneficiary) in accordance with the terms of the obligation given by the guarantor, a sum of money upon presentation by the beneficiary of a written request for her payment.

A bank guarantee, as one of the newest ways to ensure the fulfillment of an obligation in Russian law, has its own specific features that distinguish it primarily from a guarantee:

1) a bank guarantee is a unilateral will of the guarantor and, therefore, is a unilateral transaction;

2) the validity of a bank guarantee does not depend on the main obligation for which it was issued, even if the guarantee contains a reference to this obligation (Article 370 of the Civil Code);

3) a bank guarantee is issued only by a legal entity licensed to carry out banking or insurance activities;

4) a bank guarantee is provided for a fee, i.e. it is a paid transaction;

5) recourse claims from the guarantor to the principal arise only on the basis of an agreement between them;

6) the obligation of the guarantor to the beneficiary is limited to the payment of the amount of money specified in the bank guarantee, and at the same time, the beneficiary has the right to demand payment of the penalty provided for in the guarantee, compensation for losses, etc.

The types of bank guarantees include:

▪ direct guarantee, i.e. a guarantee in favor of the principal's counterparty;

▪ guarantee through a bank, i.e. a guarantee in favor of the bank serving the principal's counterparty;

▪ irrevocable by law or revocable, if such a rule is established in it.

The bank guarantee comes into force from the moment of its issuance or with a suspensive condition (Article 157 of the Civil Code), if the guarantee stipulates that it comes into force "from a future date."

In Art. 378 of the Civil Code exhaustively defines the grounds for terminating a bank guarantee:

1) payment of the corresponding amount by the guarantor to the beneficiary;

2) expiration of the warranty period;

3) waiver by the beneficiary of his rights under the guarantee.

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