The college of Law at the University of Baghdad Discusses a Master’s Thesis on Liability Arising from Letters of Guarantee
The college of Law, University of Baghdad, held a discussion of a master’s thesis titled “Liability Arising from Letters of Guarantee”, submitted by the student Osama Sameer Zinad in the Private Law Department, on Wednesday, September 3, 2025, in the Model Courtroom at the college.
The examination committee consisted of the following professors:
- Prof. Dr. Ali Mutshar Abdul Sahib – Chairman
- Prof. Dr. Jamal Abdul Kadhim Yassin – Member
- Asst. Prof. Dr. Nasreen Ghanem Hanoun – Member
- Prof. Dr. Haidar Faleh Hassan – Member and Supervisor
- Thesis Aim:
The thesis aimed to explore the possibility of reconciling the general rules of civil liability, whether contractual or tortious, with letters of guarantee, considering them a tool of financial guarantee and banking credit. It examined whether these legal principles could be adapted to govern disputes that may arise among the parties to the guarantee and whether compensation could be awarded in accordance with the rules of liability.
Structure of the Thesis:
The thesis was divided into two chapters:
- Chapter One: The general framework of civil liability arising from letters of guarantee.
- Chapter Two: The specific instances in which such liability may arise.
Key Recommendations:
- The thesis proposes that the Iraqi Ministry of Planning, in coordination with the Council of Ministers, amend the Instructions for Implementing Government Contracts No. 2 of 2014, particularly Regulation No. (17) and the associated standard documents, by replacing the term “bank guarantee” with “letter of guarantee” wherever it appears.
- The justification is that a bank guarantee is an accessory obligation that allows the bank to avoid payment under certain conditions, whereas a letter of guarantee is characterized by independence and obliges the bank to fulfill the guarantee as long as its conditions are met.
- The thesis also recommends that the Iraqi legislator add the following paragraph to Article (293) of the current Commercial Law, designating it as “Second”, and re-numbering the existing text as “First”:
“The relationship between the bank and the beneficiary shall be subject to the provisions of this law and the regulations and instructions issued pursuant to it. Any breach committed by either party against the other shall result in tort liability unless otherwise agreed, and without prejudice to any criminal or disciplinary penalties stipulated in other laws.”
