Bank Guarantees

All these are characteristics of first demand guarantees( Choose three)

• Independent obligation

• Payment on first demand

• Guarantor must verify non-performance before payment

• Guarantor only has payment obligation and no performance obligation

Indemnity is an undertaking that( choose 1)

• Assures protection against all losses

• Assures payment of a certain amount

• assures payment on non-performance

• assures payment on performance

What are three differences between LC and Bank Guarantees(LG). Choose three correct ones

• LC relates to payment on performance while LG is a payment on non-performance

• LC is issued under URDG758 while LG is issued under UCP 600

• All LCs are invoked and paid while LGs are rarely invoked

• LCs are issued under ICC rules whileLGs are issued under ICC Rules and Local Laws

Which one is an indemnity?( choose 1)

• Bid Bond

• Advance Payment Guarantee

• Performance Guarantee

• Shipping Guarantee

Usually Beneficiary of a First Demand Guarantee will, while making a claim, certify non-performance by the Applicant. True or False?

• True

• False

Suppose a Issuer refuses to honor a first demand by beneficiary at the request of Applicant? What can be the consequence? Choose two best answers

• No consequence

• Guarantor may have to pay damages in addition to guarantee amount

• Guarantor's reputation may suffer

• Applicant is answerable non-payment

When can a beneficiary make a claim on a bid bond ( Choose two)

• When the applicant does not win the contract

• When the applicant wins the project bid but doesnt want accept the project

• Applicant wins the project bid but refuses to furnish a performance bond

• when the applicant misuses the advance payment

This guarantee is issued to prevent misuse of project advance payments given by beneficiary to applicant ( Choose 1)

• Bid bond

• Performance guarantee

• Payment guarantee

• Advance Payment Guarantee

The law applicable to First demand guarantee when no Law is specified:( Choose 1)

• URDG758

• ISP98

• Local laws of Issuer

• UCP600

The importer is the beneficiary of which guarantee?( Choose 1)

• Important Guarantee

• Export Guarantee

• Shipping Guarantee

• Customs Guarantee