Is a Payment Guarantee a guarantee or an on-demand bond?

Introduction

Issues relating to bonds, guarantees, counter-guarantees, performance bonds or on-demand bonds, and obligations arising under each of these instruments for the parties concerned have been brought before the English courts for a considerable period of time. In 1958, in Hamzeh Malas & Sons v British Imex Industries Ltd,[1] the High Court decided in relation to confirmed letters of credit which are comparable to bank guarantees that: