on demand bond

on demand bond
bonds that impose a primary contractual obligation on the issuer to pay a specified sum of money on the happening of a specified event or events. The bond is normally expressed to be payable "on demand" or "on your first demand" and the buyer is entitled to payment under an on demand bond simply on submitting a statement that the seller is in default of the contract and the buyer has suffered a loss.
Related links
Bonds, guarantees and standby credits: overview

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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