This is a sample that may provide useful guidance, but the exact wording is subject to the agreement of the Parties and that made with the issuing bank.

PERFORMANCE GUARANTEE

We refer to the Contract signed on ...................... between you and ................................. (hereinafter referred to as the “Contractor” related to ................................. (hereinafter referred to as the “Contract”) and the provisions of the Contract, ............ under which the Contractor has agreed to provide a Performance Guarantee in your favour in order to guarantee the performance of its contractual obligations.

Therefore, we Bank ........................................ the undersigned issue this Performance Guarantee in your favour for a maximum amount of ................. (the “Guarantee Amount”) and undertake, if the Contractor fails substantially to fulfil its obligations under the Contract, to pay you all or part of the Guarantee Amount within ........ calendar Days from your written demand by registered mail stating that the Contractor has failed to fulfil its obligations under the Contract. Such demand shall be accompanied by a copy of your notice to the Contractor stating that the Contractor is in breach of its obligations under the Contract, detailing such breach, and requiring the Contractor to take the necessary steps to remedy such breach, failing which, the Performance Guarantee may be called.

This Performance Guarantee comes into force on the Start Date according to the Contract.

No variation of the Contract vitiates or otherwise affects this Guarantee.

Its actual amount shall be reduced by half on Taking-Over/Provisional Acceptance and at the latest on .................. and will expire upon Final Acceptance and at the latest on .....................

Consequently, any written demand under this guarantee must be received by us on or before the said date of expiry.

On its expiry, it will become automatically null and void, whether or not returned to us.

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This Performance Guarantee is not assignable or transferable.

This Performance Guarantee is subject to the current Uniform Rules for Demand Guarantees published by the International Chamber of Commerce (ICC).

This Performance Guarantee shall be governed by the law of ......................................

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules (the ‘ICC Rules’).

Good notice under this Guarantee may be made by [this should be the person responsible for the guarantee at the bank .....................................................................]

ICC AT A GLANCE

ICC is the world business organization, a representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world.

The fundamental mission of ICC is to promote trade and investment across frontiers and help business corporations meet the challenges and opportunities of globalization. Its conviction that trade is a powerful force for peace and prosperity dates from the organization’s origins early in the last century. The small group of farsighted business leaders who founded ICC called themselves “the merchants of peace”.

Because its member companies and associations are themselves engaged in international business, ICC has unrivalled authority in making rules that govern the conduct of business across borders. Although these rules are voluntary, they are observed in countless thousands of transactions every day and have become part of the fabric of international trade.

ICC also provides essential services, foremost among them the ICC International Court of Arbitration, the world’s leading arbitral institution. Another service is the World Chambers Federation, ICC’s worldwide network of chambers of commerce, fostering interaction and exchange of chamber best practice.

Within a year of the creation of the United Nations, ICC was granted consultative status at the highest level with the UN and its specialized agencies.

Business leaders and experts drawn from the ICC membership establish the business stance on broad issues of trade and investment policy as well as on vital technical and sectoral subjects. These include financial services, information technologies, telecommunications, marketing ethics, the environment, transportation, competition law and intellectual property.

ICC was founded in 1919. Today it groups thousands of member companies and associations from over 130 countries. National committees work with their members to address the concerns of business in their countries and convey to their governments the business views formulated by ICC.

SOURCE PRODUCTS FOR GLOBAL BUSINESS

ICC’s specialized list of publications covers a range of topics including international banking, international trade reference and terms (Incoterms), law and arbitration, counterfeiting and fraud, model commercial contracts and environmental issues.

ICC products are available from ICC national committees, which exist in over 80 countries around the world. Contact details for a national committee in your country are available at www.iccwbo.org

You may also order ICC products online from the ICC Business Bookstore at www.iccbooks.com

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Parties are advised always to obtain legal advice as to the enforceability of bonds or guarantees of any type, as requirements may differ from jurisdiction to jurisdiction. In addition to the conditions set forth in the guarantee, the Employer’s right to make a claim under the guarantee is – as between Employer and Contractor – subject to the conditions set forth in Article 11 of the Conditions of Contract.