What Are The Impact For Not Using URDG No 758

What are the impact for not using URDG No. 758 format?
URDG No. 758, which stands for Uniform Rules for Demand Guarantees, is a widely
recognized set of rules published by the International Chamber of Commerce (ICC)
that governs demand guarantees. These rules provide a standardized framework for
the issuance, use, and enforcement of demand guarantees in international trade.
The impact of not using URDG No. 758 format can vary depending on the specific
circumstances and parties involved. However, here are some potential impacts of
not adhering to URDG No. 758:
1. Lack of Standardization: URDG No. 758 provides a standardized format and

terminology for demand guarantees. Not using this format may lead to confusion,
inconsistencies, and misunderstandings between parties, potentially resulting in
disputes or disputes.
2. Unclear Terms and Conditions: URDG No. 758 includes specific provisions that
clarify the rights, obligations, and liabilities of the parties involved in a demand
guarantee. By not using this format, the terms and conditions of the guarantee
may be unclear or open to interpretation, leading to potential disagreements.
3. Increased Risk: URDG No. 758 is designed to provide a balanced approach to
demand guarantees, protecting the interests of both the beneficiary and the
applicant. By not using this format, parties may expose themselves to increased
risk or uncertainty in the event of disputes or non-performance.
4. Legal Enforceability: URDG No. 758 has been widely adopted by banks, financial
institutions, and trade professionals globally. Not using this format may raise
questions about the legal enforceability and recognition of the demand
guarantee, potentially affecting the ability to secure payment or fulfill contractual
obligations.
5. Limited Market Acceptance: Many international trade transactions and contracts
specify the use of URDG No. 758 as the governing rules for demand guarantees.
By not using this format, parties may face challenges in finding willing
counterparties or banks willing to accept alternative formats, limiting market
acceptance and potentially hindering trade or business opportunities.
It is important to note that the impact of not using URDG No. 758 format can vary
depending on the specific circumstances and contractual arrangements. Parties
involved in demand guarantees should carefully consider the applicability and
benefits of adopting internationally recognized rules like URDG No. 758 to ensure
clarity, standardization, and legal enforceability in their transactions. Consulting legal
and trade professionals is recommended for specific advice and guidance in this
matter.
The Uniform Rules for Demand Guarantees (URDG) No. 758 is a set of rules that
govern the use of demand guarantees in international trade. The rules provide a
framework for the parties involved in a demand guarantee to understand their rights
and obligations. They also provide a mechanism for resolving disputes that may
arise.
If a demand guarantee is not issued in accordance with URDG No. 758, there is a
risk that the beneficiary may not be able to enforce its rights under the guarantee.
This is because the rules provide a clear and unambiguous framework for the parties
involved. Without the rules, it may be more difficult for the beneficiary to prove that it
is entitled to payment under the guarantee.
In addition, if a demand guarantee is not issued in accordance with URDG No. 758,
it may be more difficult for the beneficiary to obtain a judgment against the issuing
bank. This is because the rules provide a number of defenses that the issuing bank
may be able to raise. Without the rules, the issuing bank may be able to raise
additional defenses that would make it more difficult for the beneficiary to obtain a
judgment.
As a result, there are a number of risks associated with not using URDG No. 758
when issuing a demand guarantee. These risks can be avoided by using the rules,
which provide a clear and unambiguous framework for the parties involved.
Here are some of the specific impacts of not using URDG No. 758 format:
 The beneficiary may not be able to enforce its rights under the guarantee.
 The beneficiary may have difficulty obtaining a judgment against the issuing
bank.
 The parties may have to negotiate a new agreement, which may be more
difficult and time-consuming.
 The transaction may be delayed or even cancelled.
Overall, using URDG No. 758 can help to reduce the risk of disputes and ensure that
the parties involved in a demand guarantee transaction understand their rights and
obligations.
References
 International Chamber of Commerce (ICC): Uniform Rules for Demand

Guarantees (URDG) No. 758, 2010 Revision
 ICC Banking Commission: Guide to the ICC Uniform Rules for Demand
Guarantees (URDG) No. 758, 2010 Revision
 World Bank: Guide to International Trade Finance, 2015 Edition
 American Bar Association (ABA): Committee on Banking Law and Practice: The
Uniform Rules for Demand Guarantees (URDG) No. 758: A Commentary, 2011

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What are the impact for not using URDG No. 758 format?

1. Lack of Standardization: URDG No. 758 provides a standardized format and

 International Chamber of Commerce (ICC): Uniform Rules for Demand

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