If the bank issues a guarantee, the contractual arrangement between the parties is trilateral, whereby the bank undertakes a secondary obligation to guarantee that B will perform its contractual obligations to A. Therefore, any defences available to B are also available to the bank, and A must prove that B has invalidly failed to perform its contractual obligations. In such a case, depending on the nature of the guarantee, A can have recourse against the bank: (a) in damages, for a breach of the bank's obligation to ensure B's performance; or (b) requiring it to step into B's shoes and pay the amount owed by B on the satisfaction of any notice or demand requirements contained in the guarantee.
To the contrary, when the bank issues a performance bond, there are two independent bilateral arrangements in place: one between A and B, and the other between A and the bank. By virtue of the performance bond, the bank is obliged to pay A the secured amount if certain notice/demand conditions are satisfied, irrespective of whether any payment is due from B to A under the primary contractual arrangement.
Therefore, whether a given transaction involves a guarantee or a performance bond depends on the relative bargaining strengths of the parties, and the difference assumes great significance in cases where there is a dispute between A and B as to the existence of the primary payment obligation. It was one such case which was recently considered by the English High Court in Wuhan Guoyu v Emporiki Bank of Greece [2012] EWHC 1715 (Comm).
The question is incorrect, because perfomance bond is the type of a bank guarantee.
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Contract Performance Bonds - Contractors will usually be asked to provide a performance bond for up to 20% of the contract price to protect the employer.Advance Payment Bonds - In circumstances where advances are being given before work is carried out or material delivered an advance payment bond protects the party making the advance recover the funds if the work is not completed or materials are not supplied.
International trade is trade between two or more countries, while external is a trade in another country.
There is no functional difference; they are the same thing, though they may be applied to differentiate between economic activity between certain groups of states and the world as a whole.
For original estimate approach it does not take into account for past cost performance for forecasting of future performance and only take original cost of work. Whereas revised estimate approach takes past cost performance as a good forecast indicator for future performance.
The performance bond is what you might get depending on interest rates. The bank guarantee is more secure and will be guaranteed money regardless of what the economy does.
Security Deposit is the amount kept by the customer towards the guarantee against completion of a contract.;where as performance guarantee is the guarantee given by the contractor towards performance quality of the executed job/supplied product.Thus requirement of security deposit ends with complete execution of the contract whereas Performance guarantee holds till the period of warranty/defectliabilityis over.
What is the difference between warrenty and guarantee? In: http://wiki.answers.com/Q/FAQ/4423[Edit categories]
difference between national and international awards
Performance gtee is basically guarantee a performance of your client, the employer if not satified with the performance of you client as per the agreement signed with them the employer could claim the money guaranteed from the bank. The financial gtee is basically when the bank guarantees a purchase done by its client from any of its suppliers... if the banks cusotmer does not make a payment after the purchase is done within a stipulated time frame stated in the agreement the bank is bound to pay.
guarantee means that the seller will completely replace the product or item while warranty means that the seller will repair the product or item. SHAHZAIB SHEHZAD
what is the difference between international communication and global communication
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there is no difference between high pressure and performance chromatography
nothing
A retention bond refers to a percent of contract value retained until work is finished. The performance bank guarantee is used to secure completion of conditions in the contract.
display is something you see, however, performance is something you do.