1. (Name of Company)- PERFORMANCE BOND
____________________________________________________________________________________________________________________________________________________________________________
(On the Letterhead of the Bank)
(Date)
To: _________________________ (Name)
_________________________ (Address)
_________________________ (Address)
Dear Sir,
PERFROMANCE GUARANTEE – (Name of Company)-(Name and Description of
the Project)
You entered into a contract with __________________________(Name of Company)
dated ______________.
We, (Name of Bank), irrevocably and unconditionally undertake with you that whenever
you give written notice to us stating that in your sole and absolute judgment the (1st party)
has failed to observe or perform any of the terms, conditions or provisions of the Contract
on its part to be observed or performed, we will, notwithstanding any objection which
may be made by the (1st Party) and without any right of set-off or counterclaim,
immediately pay to you or as you may direct such amount as you may in such notice
require not exceeding (Amount in words and Figure).
This Bank Guarantee (Performance Bond) is valid and will continue to be valid from the
date of this letter for the Guaranteed Sum until the Performance Certificate is issued by or
on behalf of the Employer to you, the 2nd Party pursuant to the main contract or, if a
dispute arises under the contract, after the final determination of that dispute, whichever
occurs later.
Upon receiving a notice from you, we shall immediately effect payment to your Account
No. __________with (Name of Bank and Address) of the value of the sum claimed by
you in relation to the default up to the maximum value of the Guaranteed Sum and any
payment by us in accordance with this Guarantee must be immediately available and
freely transferable (Amount in words) free and clear of and without any deduction for or
on account of any present or future taxes, levies, imposts, duties, charges, fees, set off,
counterclaims, deductions or withholdings of any nature whatsoever and by whomever
imposed.
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2. Our obligations under this Guarantee constitute direct primary, irrevocable and
unconditional obligations, and do not require any previous notice to or claim against the
Nominee and will not be discharged or otherwise prejudiced or adversely affected by any:
• Time, lenience or tolerance which you may grant to the Nominee;
• Amendment, modification or extension which may be made to the Contract or the
Works executed under the Contract;
• Intermediate payment or other fulfillment made by us;
• Change in the constitution or organization of the Nominee; or
• Other matter or thing which in the absence of this provision would or might have
that effect, except a discharge or amendment expressly made or agreed to by you
in writing.
This Guarantee may not be assigned by you to any person, firm or company other than an
Affiliate (being a related, subsidiary, sister or parent or group company), without written
consent, which must not be unreasonably withheld. You must notify us in writing of any
assignment, after which we must make any payment claimed under this Guarantee to the
person, firm or company specified in the notice which will constitute a full and valid
release by us in relation to that payment.
Any notice required by this Guarantee is deemed to be given on the date of receipt of the
notice/registered post/recorded delivery or as otherwise advised by and between the
parties.
Our liability under this Guarantee will be irrevocable and, except as stated in this
Guarantee, unconditional in all respects.
Capitalized words and phrases used within this Guarantee have the same meaning as are
given to them in the Contract.
The laws governing this Guarantee shall be the laws applicable in the ________ and the
jurisdiction shall be that of the Court of Municipality of _________.
IN WITNESS of which the (Name of Bank) has duly executed this Guarantee on the date
stated above.
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3. SIGNED for and on behalf of (Name of Bank) )
As their duly authorized and appointed )
Representative in the presence of ) ..................................................
) Executed by the duly authorized
) and appointed representative
)
.................................................................................. )
Signature of Witness ) ...................................................
)
)
)
................................................................................... )
Name of Witness )
)
................................................................................. )
Address of witness ) Bank Stamp
Address for Notices:
___________________________
___________________________
___________________________
___________________________
___________________________
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Legal Documents series of 2010