Bank guarantees

• Author: Vasile Nemes
• Position: Associated Professor, Ph.D., Faculty of Law, 'Nicolae Titulescu' University, Bucharest
• Pages: 128-136

128 Lex ET Scientia. Juridical Series

LESIJ NO. XIX, VOL. 2/2012

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BANK GUARANTEES

Vasile NEMEŞ*

Abstract

The present study propose the analyse of the irrevocable commitment of a bank entity towards

a determined person, through which guarantees a certain legal conduct of its client, and, in case of

breach, assumes the payment obligation of a determined amount of money. This kind of legal

technique it is called bank guarantee and in the usual business language it is called “Letter of Bank

Guarantee”. The determined reason to choose this scientific initiative it is the frequency of this kind

of financial - banking commitments with various practical issues which are occurred by the use of

those.

From the legal point of view, the bank guarantees are not under an own legal regulation and

are based on the common law, used in the guarantees domain. Through the new aspects of the actual

Civil Code it are the legal regulation of the letter of bank guarantee and of the comfort letter, which

shall constitute the main regulation in the negotiation and conclusion of a letter of bank guarantee or

a bank comfort letter. For the legal reports with foreign elements, the parties can also use the

Uniform Rules regarding the Guarantees at Request (URGR) Publish no.758/2010.

Keywords: guarantee, letter of guarantee, comfort letter, obligation, issuant, beneficiary,

debtor.

1. Introductory notions

By adopting the new civil code, several institutions of private law have been redefined and

others were first introduced in the Romanian legal regulation. They also include the institution of

guarantees.

The participants in relationships involving obligations specific to guarantees may be the

natural persons and legal entities and, according to this criterion, the guarantees may be real, when

these relate to movable or immovable property and personal guarantees, when the guarantor is liable

with all the present and future assets to guarantee his obligations.

2. The concept of bank guarantee

In the practice of commercial activities are more frequent the situations where the obligations

undertaken by different subjects of legal relationships are guaranteed by the banking entities or by

non-banking financial institutions1.

The bank guarantees are preferred to other categories of guarantees due to the financial

credibility enjoyed by the banking companies in the relevant market, as well as due to easiness to

capitalize them.

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* Associated Professor, Ph.D., Faculty of Law, “Nicolae Titulescu” University, Bucharest (e-mail:

avocatnemes@yahoo.com).

1 The non-banking financial institutions are regulated by the Law no. 93/2009 regarding the non-bank ing

financial institutions, published in the Official Gazette no. 259 of April 21, 2009.