When conducting international business transactions, banks often require the issuance of performance guarantees or standby letters of credit. These instruments provide security to the parties involved by ensuring that contractual obligations will be fulfilled. In this article, we present a translated template of an English bank performance guarantee, commonly used in international trade.
The guarantee should start with identifying information such as the name and address of the applicant (the party requesting the guarantee) and beneficiary (the party receiving it). The date of issuance and the expiration date should be clearly stated. Additionally, a brief description of the underlying contract or agreement being guaranteed must be specified.
This section outlines the specific obligations and responsibilities of the applicant under the contract. It may include details such as payment terms, delivery schedule, quality standards, and any other relevant performance criteria. It is crucial to accurately translate these obligations to ensure mutual understanding between the parties.
In this part, the exact amount of the guarantee should be clearly stated, along with the currency in which it is denominated. Be sure to convert the amount accurately if necessary. The guarantee must cover the full value of the contract and any potential damages or penalties that may arise from non-performance.
The duration of the guarantee needs to be specified, including the starting and ending dates. If there are provisions for extension or renewal, they should be detailed here. A grace period after the expiration date might also be included, providing flexibility to both parties in cases where a claim arises shortly after the guarantee's expiry.
It is essential to identify the governing law under which any potential disputes would be resolved. Specify the jurisdiction, which could be a specific country or an international arbitration center. Clear terms on legal procedures and enforcement mechanisms will help establish trust and assure all parties of a reliable recourse in case of dispute.
Finally, the guarantee should be signed by authorized representatives of both the issuing bank and the applicant. Their positions and full names should be stated explicitly. This section also serves as acknowledgment that they understand and accept the terms and conditions of the guarantee.
