A bank guarantee is an undertaking by a bank to pay a beneficiary in defined circumstances, used to secure performance, advance payments, tender obligations and retentions. Beyond that it is a creature of the applicable national law, which varies considerably; the International Chamber of Commerce’s Uniform Rules for Demand Guarantees apply only where the parties adopt them in the instrument itself. The distinction that decides the commercial risk is between an independent demand guarantee and a suretyship. Under a demand guarantee the bank pays against a complying demand, examining documents alone and not the underlying contract, so a beneficiary can call it without first proving default. A suretyship is accessory to the underlying obligation and payment depends on establishing that the principal actually defaulted. Read which one you have before pricing the risk.
Why nothing is quoted here. This lexicon quotes only text it has actually read, from the body that issued it. The instrument described above has a real owner, named in the paragraph, but that owner does not publish the operative wording openly, and reproductions circulating on brokers’, carriers’ and consultants’ websites are not the issuing body’s publication and are not treated as the source. So this entry describes the instrument’s role and structure and stops there. For the wording that will actually govern your transaction, go to the issuing body — and read the version your contract incorporates, since these texts are revised.