Practical Law UK Glossary 9-200-1381 (Approx. 4 pages)
Glossary
Bank guarantee
Not a term of art, and generally a reference to an undertaking by a bank to cover a debt owed by a company or individual under a transaction. A bank guarantee is sometimes an alternative to security which would be granted by a company in respect of its own indebtedness. The issuing bank will usually require a counter-indemnity and payment of a fee, or some form of security or quasi-security, from the company which is being guaranteed.
The document issued will generally be a guarantee in the legal sense, but may be another form of undertaking, such as an on-demand bond.