2) Basic Characteristics of Guarantees and Standbys
a- The Principle of Independence
Guarantees and Standbys are independent from the underlying relationship that gives…
An ISP98 rule explains the consequences of principle of independence as follows:…
“Because a standby is independent, the enforceability of an Issuer’s obligations…
i. the Issuer’s right or ability to obtain reimbursement from applicant;…
ii. the beneficiary’s right to obtain payment from the applicant;…
iii. a reference in the standby to any reimbursement agreement or underlying transaction.”
TR
EN
