I would like to have you advice about Article 7 - URDG 758 (NON DOCUMENTARY CONDITIONS)
A non-documentary condition is a condition, other than a date or a lapse of period, the fulfillment of which cannot be determined from:
- the presentation to the guarantor of a document specified in the guarantee;
- the guarantor own records; or
- an index specified in the guarantee.
Concerning the “guarantor's own records”, it doesn't cover all the guarantor’s records but only those showing amounts credited or debited from accounts held by the guarantor.
For example, if we take the following clauses in counter guarantee covering a guarantee:
- "the present counter-guarantee shall come into force on the date of issue of the guarantee by the buyer's bank..." (1)
- "the guarantee shall remain valid until the date of provisional receipt of the contract..." (2).
- "this tender guarantee shall expire on the 10th of May 2016 or on the date of issue by us of a performance guarantee" in favour of buyers...." (3)
Are conditions (1) and (2) or (3) non-documentary conditions? In my opinion these conditions are not non-documentary conditions
Now, if we take the following clause :
- "the present counter-guarantee shall come into force upon issue of the guarantee by the buyer's bank..." (4)
For me, in this case, it is a non documentary condition
In the same way, if we take a tender guarantee which indicates:
- "this tender guarantee shall expire on the 10th of May 2016 or on the issue by us of a performance guarantee in favour of buyers ....." (()
For me it is a non-documentary condition
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.
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