Guarantee checklist: Difference between revisions
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! Issue !! Narrative !! Comment | ! Issue !! Narrative !! Comment | ||
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| '''Consideration'''|| Is there consideration | | '''Consideration'''|| Is there consideration?|| | ||
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| '''Permanence''' || Is it unconditional, irrevocable and continuing || | | '''Permanence''' || Is it unconditional, irrevocable and continuing? || | ||
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|rowspan=" | |rowspan="5"| '''Unaffected'''|| Is it unaffected by:<br> | ||
*interim payments | |||
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*obligor’s insolvency | |||
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| obligor’s | | | ||
*amendment or discharge of obligor’s obligations | |||
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*beneficiary’s waiver or forbearance to obligor | |||
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*other customary grounds for discharge of guarantees | |||
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| | | '''Punctual performance''' || Does it guarantee the obligor’s “punctual performance”?|| | ||
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| ''' | | '''Without prejudice'''|| Is it without prejudice to beneficiary’s rights against obligor?|| | ||
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| ''' | | '''Independence''' || Is it independent of any other credit support arrangement between beneficiary and obligor?|| | ||
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| ''' | |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?|| | |||
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| | | '''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'''|| Is set-off or counterclaim against moneys beneficiary owes the guarantor excluded? || | ||
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| ''' | | '''Interest''' || Must guarantor pay interest from the date of demand until payment in full? || | ||
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| ''' | | '''Suspense account'''|| May beneficiary place amounts beneficiary into a suspense account pending satisfaction in full? || | ||
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| ''' | | '''Demand process'''|| May beneficiary demand without first taking steps vs the obligor?|| | ||
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| ''' | |'''No discharge if prejudice''' ||May beneficiary decline to discharge the guarantee if it might prejudice its claim under insolvency laws? || | ||
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|''' | |'''Reinstatement''' || If beneficiary discharges, is guarantor’s liability reinstated should obligor’s payments be set aside? || | ||
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|''' | |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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| | | Must guarantor hold sums it receives from obligor pending satisfaction to beneficiary’s order|| | ||
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| '''Tax gross-up'''|| Must guarantor gross up if subject to withholding on guarantee payments?|| | |||
| '''Tax gross-up'''|| Must guarantor gross up if subject to withholding on guarantee payments|| | |||
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Revision as of 08:07, 16 June 2021
| Issue | Narrative | Comment |
|---|---|---|
| Consideration | Is there consideration? | |
| Permanence | Is it unconditional, irrevocable and continuing? | |
| Unaffected | Is it unaffected by:
|
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|
||
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||
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||
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| 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 it might prejudice its claim under insolvency laws? | |
| Reinstatement | If beneficiary discharges, is guarantor’s liability reinstated should obligor’s 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 obligor pending satisfaction to beneficiary’s order | ||
| Tax gross-up | Must guarantor gross up if subject to withholding on guarantee payments? |