Guarantees (either on first demand or conditional) are standard practice in international construction projects. Often the wording of the guarantee does not allow a clear understanding on whether the parties have agreed to put in place a conditional bond or instead an unconditional and on-demand guarantee and this is the source of usually complex disputes between Employer, Contractor and Guarantor who has issued the bond. The Employer has the interest to obtain immediate payment while the Contractor normally seeks a restraining order from the competent Court to prohibit the guarantor from paying. The article aims at providing practical suggestions to avoid and minimize said controversies.
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