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Difference betyween Bank Guarantee and Indemnity Bond

(Querist) 13 November 2009 This query is : Resolved 
Dear Experts,

What is the difference between Bank Guarantee and Indemnity Bond?

In contract negotiations, sometimes this Bank guarantee V Indemnity Bond issue come up?
wherein the service receiver insist more upon Bank Guarantee?

Thanks
SONAM


adv. rajeev ( rajoo ) (Expert) 13 November 2009
Indemnity mens statement of liability to pay compensation for a loss or for a wrong in a transaction to which you are a party.
In general compenaion for a loss or wrong.
The person making an indemnity is primarily lible and can be sued by the person with whom he makes the transaction.
A gurantee mut uually be in writing, the person making a gurantee is secondarily liable if the person who i primiarily liable defaults.
Bank Gurantee: Means to promise to pay someone's debts.
Raj Kumar Makkad (Expert) 13 November 2009
The concept attached with Guarantee as defined by Rajeev has changed considerably. Now guarantor cannot exonerate to claim his liability at second place. it is the desire of the the beneficiary to recover the amount either from the borrower or his guarantor. Practically both situations are same.
Raj Kumar Makkad (Expert) 13 November 2009
in bank guarantee, bank retains equal amount of guarantee with it till the liability is not meted out whereas in case of indemnity bond, just undertaking is given and no amount is deposited along-with indemnity bond.
niranjan (Expert) 13 November 2009
I agree with Makkadsir that guarantor is not in second place but onpar with the borrower and bank can recover the amount from the guarantor.
V.V.RAMDAS (Expert) 14 November 2009
Dear Sonam,
First of all You/we should thank Mr Raj Kuamar for nice analysis in giving reply to your quary. However it is the fittest answer to your quary and I do agree with him.
G V S Jagannadha Rao (Expert) 15 November 2009
I only wish to add that when a bank guarantee is invoked, the banker will pay the amount guaranteed, to the the beneficiary, without any recourse to law.
sonam sarin (Querist) 17 November 2009
I thank all Experts for clearing my concept.
Regards
SONAM


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