A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees
The core requirement of a demand guarantee is to receive payment through the delivery of documents or a call for payment that meets the requirements of the demand guarantee. The call for payment may be accompanied by a declaration alleging a breach of the underlying agreement or a statement with fu...
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| Format: | Article |
| Language: | Afrikaans |
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North-West University
2022-10-01
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| Series: | Potchefstroom Electronic Law Journal |
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| Online Access: | https://perjournal.co.za/article/view/14060 |
| _version_ | 1797991861291319296 |
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| author | Tinaye Chivizhe |
| author_facet | Tinaye Chivizhe |
| author_sort | Tinaye Chivizhe |
| collection | DOAJ |
| description |
The core requirement of a demand guarantee is to receive payment through the delivery of documents or a call for payment that meets the requirements of the demand guarantee. The call for payment may be accompanied by a declaration alleging a breach of the underlying agreement or a statement with full particulars of the breach. However, the extent to which the data in the supporting statement or statement of breach must comply with the guarantee requirements is not always entirely clear. Over the years, a strict standard of compliance of the statement with the terms of the guarantee has been employed. This has threatened the commercial use of demand guarantees due to demands for payment being rejected. This article draws upon the approach in resolving the problems related to the conformity of a statement accompanying the call for payment through an analysis of international instruments applicable to demand guarantees (the Uniform Rules for Demand Guarantees (URDG758); the International Standby Practices (ISP98); the United Nations Convention on Independent Guarantees and Standby Letters of Credit (UNCITRAL Convention); the Supreme Court of the People's Republic of China Letter of Credit Rules (Chinese LC Rules); the Provisions of the Supreme People's Court of the People's Republic of China on Several Issues Concerning the Trial of Disputes Over Independent Guarantees (Chinese IGP), the recently issued International Standard Demand Guarantees Practice (ISDGP) and international case law in an attempt to find the most feasible approach for South African law. A supporting statement accompanying a call for payment is conforming if it indicates the event triggering the guarantor's obligation to pay as specified in the demand guarantee. Furthermore, in ascertaining whether a supporting statement is compliant, a technical interpretation of the terms of the guarantee should be avoided in favour of one that advances the common intention and purpose of the guarantee.
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| first_indexed | 2024-04-11T08:58:53Z |
| format | Article |
| id | doaj.art-e0d9b24f496e45058d1214dd2d76b72b |
| institution | Directory Open Access Journal |
| issn | 1727-3781 |
| language | Afrikaans |
| last_indexed | 2024-04-11T08:58:53Z |
| publishDate | 2022-10-01 |
| publisher | North-West University |
| record_format | Article |
| series | Potchefstroom Electronic Law Journal |
| spelling | doaj.art-e0d9b24f496e45058d1214dd2d76b72b2022-12-22T04:33:08ZafrNorth-West UniversityPotchefstroom Electronic Law Journal1727-37812022-10-012510.17159/1727-3781/2022/v25i0a14060A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand GuaranteesTinaye Chivizhe0Eduvos, Midrand, South Africa The core requirement of a demand guarantee is to receive payment through the delivery of documents or a call for payment that meets the requirements of the demand guarantee. The call for payment may be accompanied by a declaration alleging a breach of the underlying agreement or a statement with full particulars of the breach. However, the extent to which the data in the supporting statement or statement of breach must comply with the guarantee requirements is not always entirely clear. Over the years, a strict standard of compliance of the statement with the terms of the guarantee has been employed. This has threatened the commercial use of demand guarantees due to demands for payment being rejected. This article draws upon the approach in resolving the problems related to the conformity of a statement accompanying the call for payment through an analysis of international instruments applicable to demand guarantees (the Uniform Rules for Demand Guarantees (URDG758); the International Standby Practices (ISP98); the United Nations Convention on Independent Guarantees and Standby Letters of Credit (UNCITRAL Convention); the Supreme Court of the People's Republic of China Letter of Credit Rules (Chinese LC Rules); the Provisions of the Supreme People's Court of the People's Republic of China on Several Issues Concerning the Trial of Disputes Over Independent Guarantees (Chinese IGP), the recently issued International Standard Demand Guarantees Practice (ISDGP) and international case law in an attempt to find the most feasible approach for South African law. A supporting statement accompanying a call for payment is conforming if it indicates the event triggering the guarantor's obligation to pay as specified in the demand guarantee. Furthermore, in ascertaining whether a supporting statement is compliant, a technical interpretation of the terms of the guarantee should be avoided in favour of one that advances the common intention and purpose of the guarantee. https://perjournal.co.za/article/view/14060Call for paymentdemanddemand guaranteestrict compliancestatement of breachsupporting statement |
| spellingShingle | Tinaye Chivizhe A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees Potchefstroom Electronic Law Journal Call for payment demand demand guarantee strict compliance statement of breach supporting statement |
| title | A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees |
| title_full | A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees |
| title_fullStr | A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees |
| title_full_unstemmed | A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees |
| title_short | A Comparative Analysis of the Approach to the Conformity of a Supporting Statement Calling for Payment Under Demand Guarantees |
| title_sort | comparative analysis of the approach to the conformity of a supporting statement calling for payment under demand guarantees |
| topic | Call for payment demand demand guarantee strict compliance statement of breach supporting statement |
| url | https://perjournal.co.za/article/view/14060 |
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