Abstract: | A guarantee (particularly a bank guarantee) is commonly utilized in international
trade as a personal security for a claim. Many practical matters connected with
its use have been regulated in the Uniform Rules for Demand Guarantees (last version
is from 2010) prepared by the International Chamber of Commerce in Paris. These rules
are frequently applied in professional, commercial trade and they also indirectly indicate
the proper law for matters, which they do not regulate. In other cases it is necessary to
establish the law proper for guarantees. Currently this is most often done on the basis
of the Rome I Regulation. In Poland, the proper law concerning the capability of parties
to conclude a guarantee agreement is determined by the Private International Law
Act 2011.
According to the Rome I Regulation it is possible to choose a proper law for guarantee
agreements. If no choice was made, it is generally the law of the country of guarantor’s
habitual residence. If, however, the guarantee is more closely connected with the law of
a different country, that law is to be applied. Regardless of the proper law for the guarantee
it is also necessary to determine the proper law for other legal issues which appear
in the background of the guarantee, e.g. confirmation of guarantee, counter‑guarantee,
indirect guarantee.
The proper law for the guarantee determines the admissibility, content and legal
nature of the agreement. It also determines the admissibility of assigning the rights
derived from such an agreement and the expiry of the legal relation created by the guarantee
agreement. |