What to Do When Your Demand under Guarantee is Rejected
Demand Guarantee Rejected?
Your Guide to Action Under URDG 758
1. Present a New, Complying Demand
When a demand is rejected, it's as if it never happened. You have the right to submit a new, corrected demand. The key is to fix the mistakes and ensure the new presentation is made on or before the guarantee's expiry date.
2. Scrutinize the Rejection Notice
The guarantor must follow strict rules, sending notice "without delay" (within 5 business days). It must clearly:
3. Use the "Preclusion Rule"
This is powerful protection. If the guarantor fails to follow rejection rules (e.g., they miss the 5-day deadline or fail to list an error), they are precluded from claiming the demand was non-complying and will be forced to pay.
4. How to Fix Common Errors
When preparing your new demand, meticulously check for these common issues:
Waiver Option
The guarantor *may* ask their client to waive discrepancies, but this is their choice. You cannot force them.
Force Majeure
Major events can pause and extend the guarantee's life by 30 days, giving you more time to act.
Your Immediate Action Plan
Upon rejection, your primary course of action is to: 1. Understand the discrepancies listed. 2. Verify the guarantor's notice was compliant. 3. Prepare & Re-present a new, flawless demand before the expiry date.
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