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Homepage (/) ... Appendix 5, Annex D: Example Form of Performance Security – Surety Bond

Appendix 5, Annex D: Example Form of Performance Security – Surety Bond

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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 D: Example Form of Performance Security – Surety Bond', in Christopher R. Seppälä, The FIDIC Red Book
Reference: Contract: An International Clause-by-Clause Commentary, (© Kluwer Law International; Kluwer Law International 2023), pp. 1375
- 1378

Name of Contract/Contract No.: Name and address of Beneficiary (the “Employer”):

We have been informed that [insert name of the Contractor] (hereinafter called the “Principal”) is your contractor under such
Contract, which requires him/her to obtain a Performance Security.

By this Bond, [insert name and address of the Contractor]

(who is your Contractor under such Contract) as Principal and: [insert name and address of Guarantor] as Guarantor are irrevocably
held and firmly bound to the Beneficiary in the total amount of [insert in figures and words the maximum amount payable and the
currency in which it is payable] (the “Bond Amount”) for the due performance of all such Principal’s obligations and liabilities under
the above named Contract.

[Such Bond Amount shall be reduced by % upon the issue of the Taking-Over Certificate for the whole of the Works under Clause 10
of the Conditions of Contract.](1)

This Bond shall become effective on the Commencement Date defined in the Contract.

Upon Default by the Principal to perform any contractual obligation, or upon the occurrence of any of the events and circumstances
listed in Sub-Clause 15.2.1 of the Conditions of Contract, the Guarantor shall satisfy and discharge the damages sustained by the
Beneficiary due to
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such Default, event or circumstances.(2) However, the total liability of the Guarantor shall not exceed the Bond Amount.

The obligations and liabilities of the Guarantor shall not be discharged by any allowance of time or other indulgence whatsoever by
the Beneficiary to the Principal, or by any variation or suspension of the Works to be executed under the Contract, or by any
amendments to the Contract or to the constitution of the Principal or the Beneficiary, or by any other matters, whether with or without
the knowledge or consent of the Guarantor.

Any claim under this Bond must be received by the Guarantor on or before [insert the date six months after the expected expiry of the
Defects Notification Period for the Works] (the “Expiry Date”), when this Bond shall expire and shall be returned to the Guarantor.

The benefit of this Bond may be assigned subject to the provisions for assignment of the Contract, and subject to the receipt by the
Guarantor of evidence of full compliance with such provisions.

This Bond shall be governed by the law of [insert the law governing the bond] being the same country (or other jurisdiction) as that
which governs the Contract. This Bond incorporates and shall be subject to the Uniform Rules for Contract Bonds, published as
number 524 by the International Chamber of Commerce, and words used in this Bond shall bear the meanings set out in such Rules.

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Whereas this Bond has been issued by the Principal and the Guarantor on [date]

Signatures for and on behalf of the Principal(3):

(signature) (signature)

(name) (name)

Signatures for and on behalf of the Guarantor(4):

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(signature) (signature)

(name) (name)

(1) When writing the tender documents, the writer should ascertain whether to include the optional text, shown in parentheses [ ].

(2) Insert: [and shall not be entitled to perform the Principal’s obligations under the Contract.]

Or: [or at the option of the Guarantor (to be exercised in writing within 42 days of receiving the claim specifying such Default) perform
the Principal’s obligations under the Contract.]

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

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

--ooOOoo--

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