Discuss (b) standby LC

The instrument: the demand guarantee = the bank's (or insurer's) independent undertaking to pay the BENEFICIARY on DEMAND (the simple claim — often the stated default's certification) — the international trade's payment-and-performance security (the seller's assurance; the contractor's bid-and-performance bonds). The legal characters (the exam's list): (1) the autonomy/independence principle — the guarantee independent of the UNDERLYING contract (the sale, the works: the underlying disputes irrelevant to the guarantee's payment — the bank pays on the guarantee's own terms (the autonomy the guarantee's first law)); (2) the documentary character — the payment against the DOCUMENTS (the demand-and-the- statement: no investigation of the facts (the bank's ministerial role)); (3) the primary liability — the guarantor-bank PRIMARILY liable (the own undertaking — not the surety's secondary (the guarantee's contrast with the suretyship (the LAW 305 companion))); (4) the demand's honour — the payment on the compliant demand (the fraud exception ALONE the stop (the "fraud unravels all" — the only the court's injunction ground (the narrow craft))); (5) the governing instruments (the URDG-type uniform rules (the practice's codification — the ICC's rules' family; the Nepal banks' practice's framework — the name-level cite)).