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Presumption against the imposition of primary liability
For the reasons explained in Chapter 5 there is a presumption that where an instrument is issued by a bank or other financial institution, or by an insurer or professional bond issuer, relating to an underlying transaction between parties in different jurisdictions, which contains an undertaking to pay ‘ on demand ’ and does not contain clauses excluding or limiting the defences available to a surety, it will be construed as a demand guarantee. Different considerations apply where the issuer of such an instrument is not a bank or other financial institution, an insurer or professional bond issuer.
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