Term
Bank guarantee
A promise of payment from a bank, independent of any underlying transactions, in the form of a guarantee, where the bank assumes the financial security of their client to ensure specific success or avoid certain damage. Bank guarantees can be represented by tender guarantees, performance and supply guarantees, deposit and payment guarantees, or warranties. In doing so, the guarantor bank usually promises to pay the sum of the guarantee as soon as the recipient requires it, meaning that the latter only has to claim that the guarantee case (the event precisely described as prone to damage in the guarantee contract) has occurred.