As we said before, about the bank guarantee, the reader will find dozens of websites where he can find valuable information about its concept and features.
That is why we wanted to focus our attention on a very specific aspect: its expiry.
That is to say, the moment when this guarantee ceases to have effect for both the beneficiary and the person covered by it.
But first, we must give a few touches on what it is and how it works to address the chosen topic.
From a commercial point of view, the bank guarantee arises from the alternative between depositing an amount of money to the beneficiary of the guarantee and offering it to a third party of great solvency (such as a bank) that will be liable for that amount of money in the event that the guaranteed obligation is breached.
The most characteristic elements of the bank guarantee are (we may forget some of them, but in general terms and for the development of this article, the following comments should be sufficient):
Endorsed: the principal (the debtor) is required to fulfill the contract and is required to guarantee his commitment with a guarantee.
Guarantor: is the bank (in this article, we will only deal with the bank guarantee) that is constituted as guarantor of the main obligation. That is to say, the bank will comply in the event that the principal obligation is not fulfilled and the guarantee is executed in a timely manner.
A beneficiary of the guarantee or creditor: this is the person who has the right to enforce the guarantee and claim from the bank the fulfillment of the guaranteed obligation.
Letter of endorsement: this is the text that establishes the obligations and rights that arise for the parties as a result of the constitution of the guarantee.
Amount guaranteed: an amount of money guaranteeing the fulfillment of the principal obligation.
Guarantee period: the period during which the guaranteed obligation is guaranteed (it can be for a specific and determined period of time, or open -which will generate more problems when canceling it-), and the default must occur within this period of time.
Execution period: the period up to which the beneficiary of the guarantee may demand payment of the guarantee from the bank, which does not have to coincide with the guarantee period or with that of the principal obligation.
This type of guarantee must be registered in a special register of the bank, to record its issue and its characteristics.
In practice, the bank guarantee has become one of the preferred collateral preferred by creditors in contracts, due to its liquidity (the bank pays a sum of money) and its apparent immediacy (in principle, there should not be much trouble in collecting the amount guaranteed, as the Bank has little reason to object to payment).
For their part, guarantors also tend to prefer this legal transaction, as it is not always implemented through financial leverage (the bank lends the guarantee and charges a fee for it, without it being necessary for the guarantor to hand over the money to the beneficiary of the guarantee or to the bank).
The bank guarantee is not typified as such (there is no specific law regulating it), so in principle it would govern consensual freedom when establishing the terms of the guarantee provided, the jurisprudential casuistry that has been dictated on this type of legal transaction and the rules set out in the Civil Code relating to the guarantee.
In this type of guarantee, it is usually agreed that the guarantee should be “at first demand”, which ultimately means that the bank cannot oppose the payment by virtue of the guaranteed business (quasi-abstract nature of the obligation), unless there is a manifest or abusive lack of rights, or the guarantee document itself suffers from serious defects in form.
In other words, the obligation of the guarantor is independent of the obligation of the guarantor and the initial contract, so that it is not necessary for the effectiveness of the guarantee to demonstrate the non-fulfillment of the guaranteed obligation, but it is sufficient for the debtor’s claim to be effective, provided that the claim is made in the agreed time and manner (see STS 1 October 2007).
In this regard, it should be noted that the case law has considered that it is not necessary to expressly indicate in the letter of endorsement the term at first request if this characteristic is presumed in the text itself and that in this case, it has such effects.