2. Evergreen / Open-ended Guarantee
Critical Expiry & Lifecycle · negotiation critical
The guarantee has no effective end date, or renews automatically for successive periods unless the guarantor serves notice of non-renewal.
Expiry & Lifecycle · negotiation critical
A demand presented with the alternative that the guarantor either extends the validity or pays the demanded amount.
9. Maximum Liability / Liability Cap
Critical Financial Exposure · negotiation high
States the maximum aggregate amount the guarantor can ever be required to pay under the guarantee, inclusive or exclusive of interest, costs and taxes.
11. Interest Above Guarantee Amount
Critical Financial Exposure · negotiation high
Express wording placing interest outside the stated guarantee amount, so that payment of the face amount does not discharge the guarantor.
14. Indemnity / Additional Amounts
Critical Financial Exposure · negotiation high
A general undertaking to indemnify the beneficiary against losses, damages or expenses arising from the guarantee or the underlying transaction.
15. Replenishment Clause
Critical Financial Exposure · negotiation critical
After a partial demand is paid, the guaranteed amount is automatically restored to its original level, so the guarantee revolves.
Demand Mechanics · negotiation critical
Bare demand combined with an express waiver of every objection, defence, set-off and reference to the underlying contract.
22. Hidden Conditionality
Critical Demand Mechanics · negotiation high
Conditions expressed in the guarantee that cannot be verified from any presented document or from the guarantor's own records.
33. Third Party Account
Critical Payment & Settlement · negotiation high
Payment is to be made to an account in a name other than the named beneficiary, or to an account in a third country.
36. Immediate / Same-Day Payment
Critical Payment & Settlement · negotiation high
Requires payment immediately, on sight, or on the same day as the demand, with no examination period.
51. Foreign Mandatory Law
Critical Law & Jurisdiction · negotiation high
Subjects the guarantee to mandatory local rules, regulations or administrative practice that override the chosen law and the incorporated rules.
54. Replacement Guarantee
Critical Bank Risk · negotiation high
Obliges the guarantor or applicant to procure a replacement guarantee from another acceptable bank on the occurrence of a stated event.
55. Bank Downgrade Trigger
Critical Bank Risk · negotiation high
A downgrade of the guarantor entitles the beneficiary to immediate payment, to cash collateral, or to replacement.
56. Sanctions / Illegality
Critical Bank Risk · negotiation critical
Addresses what happens where payment would breach sanctions, embargoes or other applicable law.
60. Underlying Contract Incorporation
Critical Underlying Contract · negotiation high
Wording that makes the underlying commercial contract, or its terms, part of the guarantee itself.
61. Performance Determination
Critical Underlying Contract · negotiation high
Requires the guarantor to determine whether the applicant has performed its obligations before paying or refusing.
65. Conclusive Evidence Clause
Critical Underlying Contract · negotiation high
Provides that the beneficiary's statement, certificate or calculation is conclusive and binding on the guarantor and the applicant.
66. Waiver of Defences
Critical Underlying Contract · negotiation critical
The guarantor waives all rights, defences and objections it might otherwise raise against payment.
Expiry & Lifecycle · negotiation medium
Fixes the date, or the event, on which the guarantor's undertaking ceases and after which no complying demand can be made.
Expiry & Lifecycle · negotiation high
The validity extends automatically for a further defined period unless the guarantor gives non-extension notice within a stated deadline.
8. Cancellation / Release
High Expiry & Lifecycle · negotiation medium
Governs how and when the guarantee is discharged before or at expiry — by return of the original, by written release, or automatically.
10. Late Payment / Default Interest
High Financial Exposure · negotiation high
Requires the guarantor to pay interest when an amount due following a complying demand is not paid within the applicable payment period.
12. Legal / Enforcement Costs
High Financial Exposure · negotiation medium
Obliges the guarantor to reimburse the beneficiary's legal, court, arbitration and enforcement costs incurred in pursuing the guarantee.
13. Gross-up / Tax Clause
High Financial Exposure · negotiation medium
Requires payment free and clear of any deduction or withholding, with the guarantor topping up the amount so the beneficiary receives the full sum.
16. Automatic Increase Clause
High Financial Exposure · negotiation high
The guaranteed amount increases automatically on stated dates, on stated events, or in line with the value of the underlying contract.
18. Claim / Demand Clause
High Demand Mechanics · negotiation medium
Sets out what the beneficiary must present, and in what form, to make a valid demand under the guarantee.
20. Bare Demand / Simple Demand
High Demand Mechanics · negotiation high
Payment is due on the beneficiary's written demand alone, with no supporting statement and no documents.
23. Documentary Conditions
High Demand Mechanics · negotiation medium
Documents that must accompany the demand — certificates, invoices, arbitral awards, inspection reports.
Demand Mechanics · negotiation medium
The beneficiary may present more than one demand under the guarantee until the guaranteed amount is exhausted.
28. Place of Presentation
High Demand Mechanics · negotiation medium
The physical or electronic address at which a complying demand must be received before expiry.
31. Alternative Currency Payment
High Payment & Settlement · negotiation medium
Allows or requires the guarantor to settle in a currency other than the currency of the guaranteed amount.
32. FX Conversion Clause
High Payment & Settlement · negotiation medium
Defines the exchange rate, the rate source and the conversion date applied where payment is made in a different currency.
34. Payment Outside Beneficiary Country
High Payment & Settlement · negotiation medium
Requires settlement to an account held in a jurisdiction other than that of the beneficiary's domicile.
Payment & Settlement · negotiation medium
The period within which the guarantor must pay a complying demand.
37. No Set-off / No Counterclaim
High Payment & Settlement · negotiation medium
The guarantor must pay in full without deduction, set-off, counterclaim or retention of any kind.
38. Open Transferability
High Parties & Transfer · negotiation high
The guarantee may be transferred by the beneficiary to any transferee, one or more times, without the guarantor's consent.
42. Successor Beneficiary
High Parties & Transfer · negotiation medium
Provides that the guarantee automatically benefits any successor to the beneficiary by merger, reorganisation or operation of law.
43. Change of Beneficiary
High Parties & Transfer · negotiation medium
Permits the named beneficiary to be replaced during the life of the guarantee, on notice or on the beneficiary's instruction.
44. Change of Control
High Parties & Transfer · negotiation medium
Attaches consequences — acceleration, a right to demand, or a right to require a replacement guarantee — to a change in ownership of the applicant or the guarantor.
47. No International Rules
High Law & Jurisdiction · negotiation medium
The instrument incorporates no ICC rule set, leaving every mechanic to the wording and to local law.
Law & Jurisdiction · negotiation high
Identifies the substantive law that governs the guarantee itself, as distinct from the underlying contract.
Law & Jurisdiction · negotiation high
Identifies the courts competent to hear disputes under the guarantee, and whether that competence is exclusive.
Law & Jurisdiction · negotiation medium
Refers disputes under the guarantee to arbitration rather than to national courts.
52. Counter-Guarantee Clause
High Bank Risk · negotiation medium
The instrument is issued by a local bank against a counter-guarantee from the applicant's bank, creating a two-tier structure.
Bank Risk · negotiation high
Requires the guarantor to maintain a minimum credit rating, failing which the beneficiary may demand payment or require a replacement guarantor.
Bank Risk · negotiation medium
Governs the position where the guarantor's business is interrupted by events beyond its control at or near expiry.
62. Third-Party Certificate
High Underlying Contract · negotiation medium
Payment requires a certificate issued by a third party such as an inspector, surveyor, arbitral tribunal or public authority.
63. Engineer Certificate
High Underlying Contract · negotiation medium
Payment is triggered by a certificate from the project engineer, typically appointed and paid by the employer.
Underlying Contract · negotiation medium
The guarantor waives its right to receive, or to give, notices — of amendment, of demand, of refusal, or of extension.
5. Entry into Force
Medium Expiry & Lifecycle · negotiation low
Suspends the effectiveness of the guarantee until a stated event occurs, typically receipt of an advance payment or contract signature.
6. Automatic Reduction
Medium Expiry & Lifecycle · negotiation low
The guaranteed amount decreases automatically on stated dates or by stated percentages without any amendment.
7. Documentary Reduction
Medium Expiry & Lifecycle · negotiation medium
The amount reduces only upon presentation of a specified document evidencing progress, delivery or payment.
19. Supporting Demand Statement
Medium Demand Mechanics · negotiation medium
The beneficiary must state, in or alongside the demand, in what respect the applicant is in breach of its obligations.
26. Single Demand Only
Medium Demand Mechanics · negotiation low
Only one demand may be presented; the guarantee terminates once a demand is honoured or refused.
27. Presentation Method
Medium Demand Mechanics · negotiation low
The form in which a demand must reach the guarantor — original paper, courier, authenticated SWIFT, or electronic record.
29. Electronic / SWIFT Presentation
Medium Demand Mechanics · negotiation low
Demands and supporting documents may be presented electronically, typically by authenticated SWIFT message.
30. Currency Clause
Medium Payment & Settlement · negotiation low
Specifies the currency in which the guaranteed amount is expressed and in which payment must be made.
39. Transfer with Guarantor Consent
Medium Parties & Transfer · negotiation low
Transfer is permitted only where the guarantor consents and effects the transfer.
40. Assignment Restriction
Medium Parties & Transfer · negotiation low
Prohibits or restricts the beneficiary from assigning its rights, its proceeds, or both, under the guarantee.
41. Assignment of Proceeds
Medium Parties & Transfer · negotiation low
The beneficiary assigns to a third party the money it may become entitled to receive, without transferring the right to demand.
46. ISP98 / Alternative Rules
Medium Law & Jurisdiction · negotiation low
Subjects the instrument to ISP98, UCP 600 or another rule set instead of URDG 758.
Bank Risk · negotiation low
Allocates the guarantee's issuance, amendment and claim-handling charges between applicant, beneficiary and guarantor.
59. Foreign Bank Charges
Medium Bank Risk · negotiation low
Deals with the charges of advising, confirming, local issuing and correspondent banks in a cross-border structure.
64. Applicant Approval Required
Medium Underlying Contract · negotiation medium
Payment requires the applicant's countersignature, approval or non-objection.
Financial Exposure · negotiation low
Allows the beneficiary to release part of the guaranteed amount while keeping the balance in force.
Demand Mechanics · negotiation low
The beneficiary may demand less than the full guaranteed amount, leaving the balance available.
45. URDG 758 Governing Rules
Low Law & Jurisdiction · negotiation low
Subjects the guarantee to the ICC Uniform Rules for Demand Guarantees, URDG 758.