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Homepage (/) ... Appendix 5, Annex F: Example Form of Retention Money Guarantee

Appendix 5, Annex F: Example Form of Retention Money Guarantee

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Author: Christopher R. Seppälä

Publication: The FIDIC Red Book Contract: An International Clause-by-Clause Commentary (/document/The FIDIC Red Book Contract: An
International Clause-by-Clause Commentary)

Organization: International Federation of Consulting Engineers

Bibliographic 'Appendix 5, Annex F: Example Form of Retention Money Guarantee', in Christopher R. Seppälä, The FIDIC Red Book Contract: An
Reference: International Clause-by-Clause Commentary, (© Kluwer Law International; Kluwer Law International 2023), pp. 1381 - 1382

Guarantee No.: [insert guarantee reference number]

The Guarantor: [insert name and address of place of issue, unless indicated in the letterhead]

Name of Contract/Contract No.: [insert reference number or other information identifying the contract between the Applicant and the
Beneficiary on which the guarantee is based]

The Beneficiary (the “Employer”): [insert name and address of the Beneficiary]

We have been informed that [insert name and address of the Contractor] (hereinafter called the “Applicant”) is your Contractor under
such Contract and wishes to receive an early payment of [part of] the retention money, for which the Contract requires him/her to
obtain a guarantee.

At the request of the Applicant, we [insert name of Guarantor] hereby irrevocably undertake to pay you, the Beneficiary/Employer,
any sum or sums not exceeding in total the amount of [insert in figures and words the maximum amount payable and the currency in
which it is payable] (the “Guaranteed Amount”) upon receipt by us of your demand in writing and your written statement that the
Applicant has failed to carry out his/her obligation(s) to rectify the following defect(s) for which he/she is responsible under the
Contract [state the nature of the defect(s)].

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At any time, our liability under this guarantee shall not exceed the total amount of retention money released to the Applicant by you,
as evidenced by Interim Payment Certificates issued under Sub-Clause 14.6 of the Conditions of Contract with a copy being submitted
to us.

Any demand for payment must contain your signature(s) which must be authenticated by your bankers or by a notary public. The
authenticated demand and statement must be received by us at the following office [insert address of office] on or before [insert the
date 70 days after the expected expiry of the Defects Notification Period for the Works], (the “Expiry Date”), when this guarantee shall
expire.

We have been informed that the Beneficiary may require the Applicant to extend this guarantee if the Performance Certificate under
the Contract has not been issued by the date 28 days prior to such Expiry Date. We undertake to pay you the Guaranteed Amount upon
receipt by us, within such period of 28 days, of your demand in writing and your written statement that the Performance Certificate has
not been issued, for reasons attributable to the Applicant, and that this guarantee has not been extended.

The party liable for the payment of any charges: [insert the name of the party].

This guarantee shall be governed by the laws of [insert the law governing the guarantee] and shall be subject to the Uniform Rules
for Demand Guarantees (URDG) 2010 Revision, ICC Publication No. 758.

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SIGNED by: (signature) SIGNED by(1): (signature)

(name) (name)

Date:

(1) Whether one or more signatories for the bank are required will depend on the bank and/or applicable law.

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