Can be the primary ,and also can the issuing bank will take the be the secondary primary liability to effect payment. Under URDG758, the governing law and jurisdiction for letter of guarantee business are clearly indicated. UCP600 does not stipulate the governing laws or jurisdiction when disputes under letter of credit happens.
2. Differences
Bank Guarantee Documentary Letter of Credit
The undertaking of the issuing bank
The documents required for payment The liability for payment The law and custom
1. Commons • Both the Bank guarantee and documentary credit are settlement method used in international trade; • They are both issued at the request of the applicant, in favor of the beneficiary, promising the payment obligation when complying documents are presented. • The banks will only deal with documents, while not being responsible for the authenticity and effectiveness of the documents, banking credit replaces the commercial credit, which in a great degree facilitate the development of international transactions.
