A guarantor undertook to pay on first demand on receipt of a certificate: ‘Stating that the Sub-Contractor has failed to fulfil its obligations under the said Sub-Contract and that the sum demanded is due and payable and such demand shall be accepted by the Surety as conclusive evidence that the sum of demand is due hereunder.’
Held: Waller LJ said: ‘This bond contains language which seems to me to make it absolutely clear that this is a bond intended to be met without the surety having either the right or the duty to make any detailed inquiry provided the demand letter conforms with the conditions of the bond. It requires payment on ‘first demand’; it provides that the statements required to be made should be conclusive evidence of the facts stated therein. That is the clearest possible indication that as between the surety, and the promisee, there will be no investigation into the underlying facts.’
Judges:
Waller LJ
Citations:
(1999) 68 Con LR 180
Jurisdiction:
England and Wales
Cited by:
Cited – Van Der Merwe and Another v IIG Capital Llc ChD 13-Nov-2007
The parties had entered into a debt factoring agreement, under which repayment was sought of some $30m, and the claimants were said to have guaranteed the loan by the factor to their company. The court was asked whether the guarantors had the same . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 30 May 2022; Ref: scu.261298