CHAPTER IX. - Final Provisions

Annex - Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on International Bills of Exchange and International Promissory Notes *[NOTE]

B. - Salient Features Of The Convention

603

5. Guarantees and avals

604

30. The provisions of the Convention dealing with the liability of the guarantor comprise one of the most attractive features of the text. The Convention subtly recognizes both the aval, or the Geneva type of guarantee, and the other, weaker type of guarantee known in common law jurisdictions.

605

31. Article 46 of the Convention provides that payment of an instrument may be guaranteed either before or after acceptance, as to the whole or part of its amount, for the account of a party or the drawee. A guarantee may be given by any person, who may or may not already be a party. A guarantee is expressed by the words "guaranteed", "aval", "good as aval" or words of similar import, accompanied by the signature of the guarantor, or effected by a signature alone on the front of an instrument. In fact, any signature alone on the front of an instrument, other than that of the maker, the drawer or the drawee, is a guarantee. The words by which a guarantee is expressed determine the nature of the obligation undertaken by the guarantor. In the absence of some notation specifying the party for whom a guarantee is given, the rules of the Convention interpret it as a guarantee for the drawee, acceptor or maker.

606

32. The crucial difference between the two types of guarantees recognized by the Convention ultimately lies in the defences that a guarantor may set up against a holder or a protected holder. They differ, depending upon the words used to express the guarantee (i.e. "guaranteed" produces a different result than "aval") and whether the guarantor is a financial institution. A guarantor that is a bank or other financial institution and which expresses its guarantee by a signature alone is considered to have contracted the stronger type of guarantee or "aval"; a guarantor that is not a bank or other financial institution and which does the same is considered to have contracted the weaker type of guarantee.

UNCITRAL Convention on International Bills of Exchange and International Promissory Notes, 1988

CHAPTER I. - Sphere Of Application And Form Of The Instrument

CHAPTER II. - Interpretation

Section 1. - General provisions

Section 2. - Interpretation of formal requirements

Section 3. - Completion of an incomplete instrument

CHAPTER III. - Transfer

CHAPTER IV. - Rights And Liabilities

Section 1. - The rights of a holder and of a protected holder

Section `2. - Liabilities of the parties

A. - General provisions

B. - The drawer

C. - The maker

D. - The drawee and the acceptor

E. - The endorser

F. - The transferor by endorsement or by mere delivery

G. - The guarantor

CHAPTER `V. - Presentment, Dishonour By Non-Acceptance Or Non-Payment, And Recourse

Section `1. - Presentment for acceptance and dishonour by non-acceptance

Section `2. - Presentment for payment and dishonour by non-payment

Section `3. - Recourse

A. - Protest

B. - Notice of dishonour

Section 4. - Amount payable

CHAPTER VI. - Discharge

Section 1. - Discharge by payment

Section 2. - Discharge of other parties

CHAPTER VII. - Lost Instruments

CHAPTER VIII. - Limitation (Prescription)

CHAPTER IX. - Final Provisions

[Post Provisions]

Annex - Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on International Bills of Exchange and International Promissory Notes *[NOTE]

B. - Salient Features Of The Convention

Notes

Endnotes

Metadata

Manifest

CHAPTER IX. - Final Provisions

Annex - Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on International Bills of Exchange and International Promissory Notes *[NOTE]

B. - Salient Features Of The Convention

5. Guarantees and avals