There are several different types of guarantee and there is no reason why there should not be several types of guarantee included in the contract.

The company can be liable in two ways under a guarantee:

A demand guarantee requires payment on the first demand. A conditional guarantee requires payment only upon the fulfilment of certain conditions.

Under a demand guarantee, as soon as the issuing bank receives a claim that fulfils the conditions of the guarantee, the issuing bank must pay under the guarantee. This means that the applicant has no right to object.

Under a conditional guarantee, any claim will be shown to the applicant before the issuing bank pays out the money - also known as a conditional guarantee. The issuing bank will not pay beneficiary's claim before it has been accepted by the applicant or a court decision stipulates payment. It is however seldom that the beneficiary will accept a guarantee payable on agreement.

You must be aware that local conditions and regulations can greatly influence whether it is Danske Bank that will issue the guarantee or a local bank, against our counter-guarantee.

If a local bank issues the guarantee, the guarantee is not subject to Danish law. This can mean, for example, that an expiry date in the guarantee is not respected. You should also be aware that commission and fees must also be paid to the foreign bank.

Guarantees from abroad
If you are to receive a guarantee from abroad and you would prefer Danske Bank to issue the guarantee, we are prepared to issue guarantees on behalf of most banks worldwide.