Documents were issued by a bank and described as ‘performance bonds’ for damages up to specified amounts. The difficulty arose from the unusual form and language of the documents. The wording of the operative clause: ‘We undertake to pay you, unconditionally, the said amount on demand, being your claim for damages brought about by the above-named principal.’
Held: This wording required the demand to contain some reference, express or implicit, to a claim for damages; but that this requirement was satisfied on the facts of the case. ‘There is a bias or presumption in favour of the construction which holds a performance bond to be conditioned upon documents rather than facts. But I would not hold the presumption to be irrebuttable, if the meaning is plain.’
Judges:
Staughton LJ
Citations:
[1990] 2 Lloyd’s Rep. 496
Jurisdiction:
England and Wales
Cited by:
Cited – Marubeni Hong Kong and South China Ltd v Ministry of Finance of Mongolia CA 13-Apr-2005
A letter was written by the Mongolian Ministry of Finance guaranteeing payment for textile plant and machinery to be supplied to a Mongolian company. A letter from the justice minister confirmed the authority of the finance minister to sign the . .
Approved – Gold Coast Ltd v Caja De Ahorros Del Mediterraneo and others CA 6-Dec-2001
The banks appealed findings as to their liability to pay out under on-demand guarantees they had given in respect of stage payments for the construction of a ship. It was claimed that the delivery times had not been met, and the builder was in . .
Lists of cited by and citing cases may be incomplete.
Banking
Updated: 17 May 2022; Ref: scu.225899