Demand guarantee

A demand guarantee is a guarantee that the guarantor must honour upon the beneficiary’s demand. The beneficiary is not required to first make a claim or take any action against the obligor of the obligation that the guarantee supports. A demand guarantee is enforceable notwithstanding any deficiencies in the enforceability of the underlying obligation.

Magic words^TM

No demand guarantee provision would be complete without the following magical incantation:

• The beneficiary may make a demand under this guarantee without having first made any demand or taken any legal steps against the obligor
• The guarantor must pay the beneficiary on demand, in immediately available funds, ...