18 Mar, 2022
Demand guarantee
A guarantee usually issued by a bank, under which the beneficiary is only required to make a demand in order to receive payment. In contrast to the conditional or suretyship guarantee – which require the beneficiary to provide proof of the principal’s default, a demand guarantee only requires that the beneficiary make a simple demand, and therefore this latter type of guarantee is relatively risky in terms of exposure to an unjustified demand on the part of the beneficiary.