| Commentary

44 Unconditional bonds

| Commentary

44 Unconditional bonds

Sometimes the wording of a contract of performance bond has the result that the liability of the person who has given the bond arises on mere demand by the creditor, notwithstanding that it may be evident that the principal is not in any way in default or even that the creditor himself is in default under his contract with the principal1. Such a bond is known as a ‘demand bond’ or ‘demand guarantee’ or even as a ‘first demand guarantee’. When given on behalf of a contractor, it may be likened to a discount of part of

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to LexisLibrary or register for a free trial