Article

In the first and the second drafts of the revised URDG, it was assumed that a rule to the effect that non-documentary conditions should be deemed as not stated could turn out to be too rigid. Accordingly, the possibility was opened for the presentation of any document, even if not required in the guarantee, to the extent that such a document could indicate the fulfillment of the condition. However, another concern emerged, namely that of self-serving documentary proof being tendered by the beneficiary or the applicant leading, for instance, to the expiry of the guarantee or the reduction of its amount, with the result that the operational process of the guarantee would be vitiated.

The Drafting Group's first attempt to revise this rule would not have precluded the applicant from presenting a mere statement indicating the occurrence of the expiry event if that event were drafted in non-documentary terms in the guarantee (e.g., in the case of a guarantee providing for expiry upon delivery of the works, the contractor tendering a statement to the guarantor stating that the works have been delivered.) The danger inherent in this kind of consequence outweighed that of a strict application of the non-documentary condition rule. Accordingly, article 7 was changed to restrict the presentation of documents indicating compliance with a condition only to those documents stipulated in the guarantee.