Bank Guarantee in UAE
by Rohit Sharma Internet MarketerBank
guarantee in UAE is
considered a commercial activity, regardless of the ability of an individual to
whom the bank guarantee is issued or the purpose for which it is issued, so
they are governed under the CTL. But at certain points reference can be also
made to Civil Transactions Act No.2 of 1985. In a bank guarantee, the
obligation of the issuing bank is separate from that of the principal debtor. This
is an independent obligation by the guarantor to the creditor of the principal
Debtor. A bank guarantee is independent of the underlying transaction or
contract between the beneficiary and principal debtor. The guarantor is bound
by the bank guarantee irrespective of the status of the beneficiary or the
nature of the contracts between the guarantor and the principal debtor, or
between the principal debtor and the beneficiary. In issuing the bank
guarantee, the guarantor is not working as a representative, agent or surety of
the principal debtor.
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Created on Oct 1st 2021 05:58. Viewed 249 times.