Abstract Principle of First Demand Guarantee and Its Restrictions
Abstract Principle of First Demand Guarantee and Its Restrictions

Summary/Abstract: Article analyses abstract principle of first demand guarantee and limitation of its problematic application. First of all, article defines and analyses concept and content of abstract principle according to international commerce practice, legal doctrine, Lithuanian law and finally how it shows in commerce practice. The further analysis concentrates on grounds of limitation of abstract principle not only from guarantor’s perspective, but also from debtor’s perspective, when he is trying to stop guarantor to fulfil his payment obligation under first demand guarantee using provisional court measures. The analysis of this article based on international commerce practice provided by URDG rules and UNCITRAL convention, newest researches in legal doctrine, but also Lithuanian legal regulation and case law on this question. Analysis shows that abstract principle is a necessary requirement for proper work of first demand guarantee. Despite this, abstract principle as the other principles in legal system cannot be absolute and especially in private commerce law there is a necessity for a restriction of its application.

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