However, the shipyard bank argued that its employee was not entitled to sign on his behalf, which invalidated the guarantee of repayment. In the current economic situation, it is likely that shipbuilders will have difficulty financing new contracts, making repayment guarantees a very important instrument to protect the interests of the buyer and its lenders. It is therefore essential that the buyer ensures that the refund guarantee offers as much protection as possible and, above all, that the guarantee of repayment is effectively applicable. It is often necessary to engage in negotiations on whether the guarantee can be called at the buyer`s request or whether it should only be summoned if an arbitrator or court has decided that the contractor should be held liable. The buyer and his lender will prefer the former, as the legal or arbitration procedures can be lengthy and ask for a refund as soon as possible. A business guarantee is a contract between a company or individual and a debtor. In this contract, the surety undertakes responsibility for the debtor`s obligations, such as the repayment of a debt.B. When a company guarantees repayment of a loan to one of its subsidiaries, the person who signed the agreement guarantees that the loan will be repaid if the subsidiary is late in the loan. A payment guarantee sometimes provides some kind of guarantee for the promise of payment at a future date, thus reducing the risk to the company making the sale.
It usually takes the form of an agreement and we often see different species. It is essential that the refund guarantee be clearly languaged with respect to catch-up procedures, as shown in the Caja de Ahorros del Mediterraneo case and others against Gold Coast Limited (2001) 1 in 2001. In this case, a guarantee of repayment indicated that the owner`s bank would repay a tranche “if the rate was repaid by the contractor in accordance with the terms of the shipbuilding contract.” In a confusing manner, the bank also understood in the guarantee to make the payment to the buyer after receiving a certificate from the buyer`s bank if the buyer decided to terminate the contract. The contract stipulated that the shipyard had to grant a guarantee of repayment to the buyer. The refund guarantee was to be signed on behalf of Bausparkasse Prominvestbank. It was signed by the head of one of the Bank`s regional divisions. Corporate guarantees and personal guarantees should contain specific information: just like bank guarantees, letters of credit vary according to need. Here are some of the most frequently used letters of credit: bank guarantees are a more important contractual obligation for banks than letters of credit. A bank guarantee, such as a letter of credit, guarantees a recipient a sum of money. The bank only pays this amount if the counterparty does not meet the contractual obligations.
The warranty can essentially be used to insure a buyer or seller of losses or damages resulting from non-compliance by the other party in a contract. Payment guarantees are financial obligations that require the debtor to repay on the basis of the terms set out in the original debt agreement. Sometimes the payment guarantee is covered by a type of asset such as the property or other asset accepted by the lender. However, in the course of the appeal process, the Tribunal ruled in favour of the purchaser and found that the wording of the repayment guarantee had created an obligation on demand, which was born independently of the shipbuilding contract. At the time of sentencing, the Tribunal was influenced by the lack of a guarantee of reimbursement of a reference to the owner`s liability in the shipbuilding contract.