Guarantee checklist: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "{| class="wikitable sortable" |+ Caption text {{aligntop}} ! Term !! Explanation !! Comment {{aligntop}} | '''Consideration'''|| Is there consideration for the guarantee|| {..." |
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! | ! Issue !! Narrative !! Comment | ||
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| '''Consideration'''|| Is there consideration for the guarantee|| | | '''Consideration'''|| Is there consideration for the guarantee|| | ||
{{aligntop}} | {{aligntop}} | ||
| Permanence || Is | | '''Permanence''' || Is it unconditional, irrevocable and continuing || | ||
{{aligntop}} | {{aligntop}} | ||
|rowspan="6"| '''Unaffected'''|| Is | |rowspan="6"| '''Unaffected'''|| Is it unaffected by: || | ||
{{aligntop}} | {{aligntop}} | ||
| interim payments || | | interim payments || | ||
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| other customary grounds for discharge of guarantees || | | other customary grounds for discharge of guarantees || | ||
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| '''Punctual performance''' || | | '''Punctual performance''' || Does it guarantee the obligor’s “punctual performance”|| | ||
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| '''Without prejudice'''|| | | '''Without prejudice'''|| Is it without prejudice to beneficiary’s rights against obligor || | ||
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| '''Independence''' || | | '''Independence''' || Is it independent of any other credit support arrangement between beneficiary and obligor. || | ||
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|rowspan="2"| '''Indemnity''' || | |rowspan="2"| '''Indemnity''' || Is there an indemnity against beneficiary’s costs of enforcement of guaranteed obligations || | ||
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| | | Is there an indemnity wrt the value of obligations which are void/unenforceable against the obligor || | ||
{{aligntop}} | {{aligntop}} | ||
| '''Currency and payment'''|| | | '''Currency and payment'''|| Must payment must be in immediately available funds in the currency of the underlying obligations|| | ||
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| '''No set-off or counterclaim'''|| | | '''No set-off or counterclaim'''|| Is set-off or counterclaim against moneys beneficiary owes the guarantor excluded || | ||
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| '''Interest''' ||interest from the date of demand until payment in full || | | '''Interest''' || Must guarantor pay interest from the date of demand until payment in full || | ||
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| '''Suspense account'''||beneficiary | | '''Suspense account'''|| May beneficiary place amounts beneficiary into a suspense account pending satisfaction in full || | ||
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| '''Demand process'''|| | | '''Demand process'''|| May beneficiary demand without first taking steps vs the obligor || | ||
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|'''No discharge if prejudice''' || | |'''No discharge if prejudice''' ||May beneficiary decline to discharge the guarantee if itmight prejudice its claim under insolvency laws || | ||
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|'''Reinstatement''' || If beneficiary discharges guarantee | |'''Reinstatement''' || If beneficiary discharges guarantee is guarantor’s liability reinstated should payments be set aside || | ||
|| | |||
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| '''Guarantor’s rights versus obligor'''|| | |rowspan="2"| '''Guarantor’s rights versus obligor'''|| Must Guarantor obtain beneficiary’s consent before taking action against obligor until guaranteed obligations are fully paid || | ||
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| '''Tax gross-up'''|| | | Must guarantor hold sums it receives from the obligor in those circumstances to beneficiary’s order|| | ||
{{aligntop}} | |||
| '''Tax gross-up'''|| Must guarantor gross up if subject to withholding on guarantee payments|| | |||
|} | |} | ||
Revision as of 13:55, 15 June 2021
| Issue | Narrative | Comment |
|---|---|---|
| Consideration | Is there consideration for the guarantee | |
| Permanence | Is it unconditional, irrevocable and continuing | |
| Unaffected | Is it unaffected by: | |
| interim payments | ||
| obligor’s insolvency | ||
| amendment or discharge of obligor’s obligations | ||
| beneficiary’s waiver or forbearance to obligor | ||
| other customary grounds for discharge of guarantees | ||
| Punctual performance | Does it guarantee the obligor’s “punctual performance” | |
| Without prejudice | Is it without prejudice to beneficiary’s rights against obligor | |
| Independence | Is it independent of any other credit support arrangement between beneficiary and obligor. | |
| Indemnity | Is there an indemnity against beneficiary’s costs of enforcement of guaranteed obligations | |
| Is there an indemnity wrt the value of obligations which are void/unenforceable against the obligor | ||
| Currency and payment | Must payment must be in immediately available funds in the currency of the underlying obligations | |
| No set-off or counterclaim | Is set-off or counterclaim against moneys beneficiary owes the guarantor excluded | |
| Interest | Must guarantor pay interest from the date of demand until payment in full | |
| Suspense account | May beneficiary place amounts beneficiary into a suspense account pending satisfaction in full | |
| Demand process | May beneficiary demand without first taking steps vs the obligor | |
| No discharge if prejudice | May beneficiary decline to discharge the guarantee if itmight prejudice its claim under insolvency laws | |
| Reinstatement | If beneficiary discharges guarantee is guarantor’s liability reinstated should payments be set aside | |
| Guarantor’s rights versus obligor | Must Guarantor obtain beneficiary’s consent before taking action against obligor until guaranteed obligations are fully paid | |
| Must guarantor hold sums it receives from the obligor in those circumstances to beneficiary’s order | ||
| Tax gross-up | Must guarantor gross up if subject to withholding on guarantee payments |