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Demand Guarantee [Last Updated by: admin on 2012-01-01]
A guarantee usually issued by a bank, under which the beneficiary is only required to make a demand in order to receive payment. In contrast to the conditional or suretyship guarantee - which require the beneficiary to provide proof of the principal's default, a demand guarantee only requires that the beneficiary make a simple demand, and therefore this latter type of guarantee is relatively risky in terms of exposure to an unjustified demand on the part of the beneficiary. Some protection against such an unfair demand can be obtained by making the guarantee subject to the Uniform Rules for Demand Guarantees (URDG 458).


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