Bank Guarantees are never negotiable instruments. A bank guarantee is a guarantee from a bank that if a debtor does not meet a debt they have, then the bank will pay for it.
However, if a debtor or potential debtor goes into a deal and uses the bank guarantee as a negotiable instrument then they should not be held in the highest esteem.
Wary business people would never accept this form of guarantee as the debtor is not going into a deal with the best of intentions to pay for the product or service they receive.
A guarantee to pay must be evidenced by a written and signed note of memorandum. Bank guarantees are always written contracts. If the primary debtor can’t pay primary liability then the guarantor takes on secondary liability for the debt.
If a person want to negotiate with you using a bank guarantee as strength it is best not to accept. If a bank guarantee has to come into play it can be a complex action and may involve some form of legal wrangle which will cause extra issues.
If you are willing to take on this hassle then it is good to know that you will be guaranteed payment. Though, it is ill advised to see it as a primary negotiating tool.
Such a tool is good for the debtor as it allows them to continue business outside of their current means and thus expand their business. Guarantees allow customers to acquire goods, buy equipment, or draw down loans and thus expand business activity.
A bank guarantee is a great thing but one that should not be used as a negotiating instrument when dealing with people in a business or for that matter, any capacity.
However, if a debtor or potential debtor goes into a deal and uses the bank guarantee as a negotiable instrument then they should not be held in the highest esteem.
Wary business people would never accept this form of guarantee as the debtor is not going into a deal with the best of intentions to pay for the product or service they receive.
A guarantee to pay must be evidenced by a written and signed note of memorandum. Bank guarantees are always written contracts. If the primary debtor can’t pay primary liability then the guarantor takes on secondary liability for the debt.
If a person want to negotiate with you using a bank guarantee as strength it is best not to accept. If a bank guarantee has to come into play it can be a complex action and may involve some form of legal wrangle which will cause extra issues.
If you are willing to take on this hassle then it is good to know that you will be guaranteed payment. Though, it is ill advised to see it as a primary negotiating tool.
Such a tool is good for the debtor as it allows them to continue business outside of their current means and thus expand their business. Guarantees allow customers to acquire goods, buy equipment, or draw down loans and thus expand business activity.
A bank guarantee is a great thing but one that should not be used as a negotiating instrument when dealing with people in a business or for that matter, any capacity.
