Browsing by Author "Teshome, Tilahun(Associat Profassor)"
Item The Law Governing Unconditional (First Demand- Independent) Bank Guarantees in Ethiopia(Addis Ababa, Ethiopia, 2017-09) Siyum, Yared; Teshome, Tilahun(Associat Profassor)This research is essentially focused on the existence of a legal basis for what is called First Demand (independent) Guarantee and the applicability of relevant laws thereto. Thus, in achieving this end, legal and case analysis are principally used. Often times, within transactions the risk of non-payment or non-performance is always there. To avoid or, at least, to minimize this risk guarantee is a preferred tool. Nonetheless, the conventional guarantee concept which is subject to various defenses and conditions before payment is perceived to be ineffective and time-consuming. Since such traditional guarantee is an accessory one, it is prone to rigorous court litigation. This leads creditors to lose the realtime value of money. In today’s Ethiopia, the need to use for the first demand (independent) type of guarantee is growing faster both in public and private procurements. This research is a modest attempt at discussing the need to have an adequate legal framework along with proper demarcation of the judiciary’s role. Moreover, the research indicates the usage of the power of foreclosure sale against collaterals employed during the issuance of FDGs by the banks while there is no legal right to this effect, as the Property Mortgaged or Pledged with Banks Proclamation’s scope of application is limited to loan reimbursement and yet issuing guarantee is not recognized as a loan under the law. Finally, this study underlines the need to make some legal development in addressing the problem.