Document background
The Irrevocable Letter of Guarantee is a fundamental financial instrument used to secure commercial obligations and mitigate transaction risks under Danish law. It is commonly required in situations where one party needs assurance of the other party's financial commitment or performance, such as in large commercial contracts, international trade, or construction projects. The document establishes a bank's unconditional commitment to pay a specified amount to the beneficiary upon compliant presentation of documents or satisfaction of stated conditions. Subject to Danish financial regulations and banking practices, it provides stronger security than a simple contractual promise as it is backed by a bank's creditworthiness and cannot be revoked without the beneficiary's consent.
