A demand guarantee is a contractual agreement between a bank acting as a guarantor and a beneficiary. It outlines the bank's commitment to pay a predetermined sum under specific conditions. In simple terms, the bank agrees to make a payment upon the written request of the beneficiary. This instrument serves as a powerful risk mitigation tool for businesses and individuals, providing a sense of security and assurance in financial transactions. Understanding the intricacies of demand guarantees is crucial for anyone involved in the world of finance.
