‘Demand bonds’ are a specialised form of irrevocable instrument, developed by the banking world for its commercial customers. They have been accepted by the courts as the equivalent of irrevocable letters of credit, and have been described as part of ‘the lifeblood of commerce’ Donaldson LJ: ‘Thrombosis will occur if, unless fraud is involved, the courts intervene and thereby disturb the mercantile practice of treating rights thereunder as being the equivalent of cash in hand.’
Judges:
Donaldson LJ
Citations:
[1981] 2 Lloyd’s Rep 256
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 . .
Lists of cited by and citing cases may be incomplete.
Contract, Banking
Updated: 09 May 2022; Ref: scu.225901