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Homepage (/) ... Appendix 5, Annex C: Example Form of Performance Security – Demand Guarantee

Appendix 5, Annex C: Example Form of Performance Security – Demand

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 C: Example Form of Performance Security – Demand Guarantee', in Christopher R. Seppälä, The FIDIC Red
Reference: Book Contract: An International Clause-by-Clause Commentary, (© Kluwer Law International; Kluwer Law International 2023),
pp. 1371 - 1374

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, which requires him/her to obtain a Performance Security.

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 indicating in
what respect the Applicant is in breach of its obligations under the Contract.

1371

1372

[Following receipt by us of an authenticated copy of the Taking-Over Certificate for the whole of the Works under Clause 10 of the
Conditions of Contract, the Guaranteed Amount shall be reduced by % and we shall promptly notify you that we have received such
certificate and have reduced the Guaranteed Amount accordingly.](1)

Following receipt by us of an authenticated copy of a statement issued by [insert name and address of the Engineer under the
Contract] that, pursuant to Sub-Clause 4.2.1 of the Conditions of Contract, variations or adjustments under Clause 13 of the Conditions
of Contract have resulted in an accumulative increase or decrease of the Contract Price by more than twenty percent (20%) of the
Accepted Contract Amount, and that therefore the Guaranteed Amount should be adjusted by the percentage specified in the
statement equal to the accumulative increase or decrease, respectively, we shall promptly inform you that we have received such
statement and have adjusted the Guaranteed Amount accordingly. In the case of a request for a decrease of the amount of the
Performance Security, the above statement shall be accompanied by your written consent to such decrease.

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.

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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.

SIGNED by: (signature) SIGNED by(2): (signature)

(name) (name)

Date:

1372

1373

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

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

--ooOOoo--

1373

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