Amendment to Guarantee

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
Post Reply
Westley
Posts: 23
Joined: Tue Feb 25, 2014 6:22 am
First Name: Westley
Last Name: Lobo
Organization: Royal Bank of Canada
Filter: Two Plus Two =: 4
Location: Canada

Amendment to Guarantee

Post by Westley »

An amendment to extend the guarantee and decrease the amount was issued, subject to beneficiary's consent. Does the beneficiary have to accept or reject the amendment prior to the present expiry date or does the beneficiary have the right to accept or reject until the extended expiry date as per the amendment.
WanDan
Posts: 68
Joined: Tue Feb 05, 2013 4:46 pm
First Name: Wan
Last Name: Dan
Organization: Bank
Filter: Two Plus Two =: 4
Location: Germany

Amendment

Post by WanDan »

Hi,

The Guarantor is bound to the amendment from the time it leaves its control (URDG). So, at least when the URDG are concerned, the beneficiary may accept or reject until the extended expiry date. This is of course a question of the underlying rules and the applicable law.

Cheers,
Dan
Westley
Posts: 23
Joined: Tue Feb 25, 2014 6:22 am
First Name: Westley
Last Name: Lobo
Organization: Royal Bank of Canada
Filter: Two Plus Two =: 4
Location: Canada

amendment to guarantee

Post by Westley »

Thank you Dan.

All three rules, UCP 600, URDG 758 and the ISP98 agree that the issuer is bound from the time the instrument leaves its control. Hence I support your views. Not all financial institutions follow this principal and hence I want to check if there there is any reason and backing for doing the same (without saying it needs to be backed by the applicable rules and standard practices).

Regards,
Post Reply