For a serious entrepreneur, everything should work exactly like a clock, so various troubles in relations with partners can negatively affect business. In order to avoid unforeseen circumstances, both on the one hand and on the other hand, companies conclude agreements of various forms among themselves, depending on what is the subject of the agreement.
Recently, more and more entrepreneurs have resorted to a bank guarantee in order to protect themselves and their partner from non-fulfillment of obligations and terms of the transaction. This document is a special agreement in which three parties participate: the guarantor bank, the beneficiary and the principal. Determining the obligations of each of the parties guarantees their timely fulfillment and avoids force majeure.
The principal is the applicant, or the person initiating the conclusion of the contract. A bank guarantee is signed on the one hand by the bank and the contractor, and on the other, by the customer, also called the beneficiary. This document guarantees the fulfillment of certain obligations by one party in relation to the other. A principal in a bank guarantee is an organization that has applied to a financial institution with a request to conclude an agreement.
Such a document allows the customer to be sure that all obligations are fulfilled, otherwise the beneficiary will receive a certain amount of money in compensation for the agreement that has not been fulfilled by the principal. If the terms of the contract are not fulfilled due to the fault of the contractor, then compensation is made from his account or a credit line drawn up in his name. But there are unpredictable circumstances, in case of occurrence of which insurance is provided.
A principal is a person who takes his work seriously and respects partners, because a bank guarantee in itself is a powerful insurance tool that protects both sides from all kinds of risks. This moment is very important in modern business conditions. Very often this document uses the principal in its contractual relations. This allows him to save excellent money, because if not for this document, more significant funds would have been spent (when applying to commercial banks with a request for a loan).
All expenses for issuing a bank guarantee are borne by the executing organization. The applicant, he is the debtor, turning to the guarantor bank must comply with all its requirements, otherwise the issuance of the document may be refused. A credit institution receives a certain remuneration for its mediation, which is paid by the principal. This condition is also spelled out in the Civil Code of the Russian Federation.
The only thing is that the law does not prescribe the procedure for paying remuneration and its amount, therefore, the applicant and the guarantor must settle this issue independently and write down all the conditions in the bank guarantee. Even if the contract does not contain a clause describing the amount of commission payments, the document is still considered valid and cannot be challenged by the applicant in court.
The guarantor bank is an intermediary between the beneficiary and the principal. He does not clarify the relationship between the parties, but only monitors the strict implementation of the conditions of the bank guarantee. Considers documents provided by partners in case of conflicts - and renders its verdict.
