A BILL OF LADING GUARANTEE

Abstract

Benefits of a bank guarantee in relation to other legal means of security prescribed by the Law of Contract are in its legal diversity and applicable use in accordance with the specific interests of business entities and their business relationships. The complexity of transportation of goods by waterways, especially from the aspect of transportation of goods by international waterways, produces a number of situations that are both legally and economically problematic from the transporters` point of view. A bill of lading guarantee gives an assurance to the shipowner as the beneficiary of the guarantee that he will be paid the guaranteed monetary amount from the guarantee if the person who was obliged to compensate the damage - the recipient of the goods, does not fulfill his obligation. In this way, the shipper is fully secured from the occurrence of possible damage and costs. This paper deals with the issues of relevance to the bill of lading guarantee, the legal nature of such a type of guarantee as well as the important issues in the domain of the ways of determination of the guaranteed amount, the valid period of the guarantee, and the manner of issuing the warranty.