Study On Some Legal Issues Of Demand Guarantees

In the business of the international trade over past years, being difficult to debtees to achieve their security interests by res' security (mortgage, pledge), debtees often need what could achieve their security interests by res' security which was ready-made, quick and guaranteed to avoid and cut down the risk of preferment, to guarantee that the business and duties are finished safely and successfully. So a new means of security which is more come into being at the opportune historic moment is a payment on first demand being a written guarantee, issued by bank, beneficial to the buyer or employment. This guarantee, bases not on whether the basic contract is preformed but on debtees' demand of payment, could overcome the shortcomings of subordinate guarantee and more accord with the demand of international business.The payment on first demand has been used widely in the foreign trade by our banks and enterprises and there is no clear regulation about it in our relevant laws which can regulate. With the globalization of Chinese economy, the business of payment on first demand must play a well role and have a good value to increase the foreign business' competitiveness of our enterprises, develop the market economy. And in this course, it must have a strong momentum to use the means of payment on first demand in national business. So, it is urgent and practical to research the legislation and practice deeply of the payment on first demand.In this paper, by elaborating the basic feature, construction and pattern of the payment on first demand, the law relationship, rights and duties of all parties existing in the payment on first demand has been expounded, the complex law relationship, the risk from the different rights and duties and the current system of payment on first demand has been analyzed. And by prospecting the current utilization and the future trend of the system of payment on first demand, I have made some suggestions on how to perfect our system of payment on first demand, pointed out the necessity and reality of how to construct the independent security system and provided a concrete means of system-making and relevant standard text made by myself. I hope these can play a good role to the security system of the international and domestic trade.