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Vincent Ding Posted 21 years ago
Legal Studies

LOG/LOI/LOU

0 letter of guarantee, letter of indemnity/ letter of undertaking 02br
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00what are the differences among them? i'm so confused in making a choice in my writing. 02br
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00tks 02br
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00vincent 0-
  

Top answer

0Not an easy question, at least for me. The uses of these documents seem to vary with the fields/industries, but LOG and LOU seem to be essentially the same-- a promise to pay-- while a LOI seems to be an assumption of responsibility, with the bottom line being paying if that responsibility fails. It seems to me that your choice may depend on the field you are speaking of, Vincent.

— Mister Micawber

  • 0Not an easy question, at least for me.
  • The uses of these documents seem to vary with the fields/industries, but LOG and LOU seem to be essentially the same-- a promise to pay-- while a LOI seems to be an assumption of responsibility, with the bottom line being paying if that responsibility fails.
  • It seems to me that your choice may depend on the field you are speaking of, Vincent.
  • ' 02br 02br 02br 00'In certain exporting countries, the government levy a heavy tax on drafts.
  • In such a circumstance, the exporter may request the importer to specify in his/her letter of credit (L/C) application that "No drafts be issued".
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3 Answers
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0Not an easy question, at least for me. The uses of these documents seem to vary with the fields/industries, but LOG and LOU seem to be essentially the same-- a promise to pay-- while a LOI seems to be an assumption of responsibility, with the bottom line being paying if that responsibility fails. It seems to me that your choice may depend on the field you are speaking of, Vincent. 02br
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I agree that the meaning can differ according to trade or industry and the words are not "terms of art".

I suggest the following general distincions can be made:

A guarantee implies that you will perform the contract if the party you are guaranteeing defaults.

An indemnity only implies that you will make good any losses suffered by the party you have agreed to indemnify.
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Yes, this is generally correct. Just keep in mind the difference between a guarantee and a suretyship. With the latter the surety is primarily liable. Which means that such party is equally responsible for the obligation upon default as the principal. In the former instance, the creditor must first seek fulfillment of the obligation from the principal and then turn to the guarantor.
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