Surety ship Bond
In e-commerce, this guarantee is a guarantee that commits to another act.
A surety contract can be defined as a subcontract under which the guarantor is liable for the original or intended original religion, failure to perform, or misappropriation of another person’s obligation (subject matter) to the subject matter.
A bank guarantee is an obligation on the part of a bank, insurance company or other financial and credit institution to pay a measurable amount to the exporter if the importer refuses to pay the price.
Now, in this type of guarantee, according to the guarantee contract, the guarantor’s obligation to pay the amount and price is not created as long as the importer does not refuse to pay.
In international trade and commerce, normally, the importer will personally pledge to the exporter to pay the price of the transaction and will strengthen this obligation by giving a bank guarantee. The exporter will send the shipping documents to the importer by sending the goods and, if necessary, will send a copy of it to the guaranteed bank. The importer checks the compliance of the documents. If the documents are matched, the importer will pay the price directly through electronic credit transfer or another agreed payment method. If the importer refuses to pay the price or explicitly refuses to pay the price, the exporter will go to the guarantor to claim and pay the price, therefore, the bank guarantee is a collateral and a minor obligation next to the main contract.
There are two points to note here; First, in filing such a bank guarantee, the plaintiff usually has to prove the debtor’s debt and the amount of the debt, that all the defenses and remedies available to the importer will also be available to the guarantor. Therefore, this type of bank guarantee provides the issuer with a secondary and more financially secure source of payment. However, this type of bank guarantee can not improve the situation of the exporter, in particular, the exporter, by proving that the importer owes him, will not get a better position in front of the bank than he has against the importer.
Second, a number of factors may lead to the collapse of the bank’s liability and the acquittal of the bank’s liability under the guarantee, which is not in the interests of the issuer. If the importer is acquitted, the bank is usually acquitted. Any change in the terms of the contract with the importer that is to the detriment of the bank and is made without the consent of the bank, including agreeing to give a deadline to the principal debtor, cancels the bank and the bank from the obligation arising from the guarantee guarantee. These adverse results can be avoided by inserting the appropriate phrase in the guarantee contract or by using other forms of bank commitment, such as performance guarantees.