The notion of the letter of guarantee emerged as one of the alternative forms for the financial deposit to safeguard the administrative contract. The aim of such a notion was to protect the party to a contract from the harm of having portions of his or her capital idle. Letters of the guarantee are either interim to make sure the contract party is committed or final to make sure the performance of contract terms is perfect. It may also be an installment paid in advance to ensure perfect performance. A fourth type is the letter of guarantee for equipment or items on loan so that the objects on loan will be returned in their original state when the operation in question is over. In brief, the letter of guarantee came into being and evolved through the changing technical and practical needs and activities of various managements The present study derives its value from the fact that it focuses on the following hypotheses: 1) What if the party to a contract does not submit a letter of guarantee? 2) Is it possible to amend the terms of the letter of guarantee? 3) Is it possible to extend the time span for the validity of the letter of guarantee? or to claim its value earlier than already specified 4) Can it be confiscated or sequesterated by the bank or the authorities The study concludes that: The management in question is independently eligible for specifying the value for the letter of guarantee and rejecting any bid which does not include the full value of the interim deposit. Withdrawing the bid before the preevaluation process makes it legal for the management to claim the value of the interim deposit without prior notice and nullifies any adverse legal procedures The bank is entitled to question the management's claim of the value of the deposit stated in the letter of guarantee; the role of the bank is to guarantee rather than to assess.

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