In today's globalized economy, banks play a crucial role in facilitating financial transactions. One important financial instrument used extensively in international trade is the bank guarantee, also known as a letter of guarantee. A bank guarantee assures the beneficiary that the bank will cover the payment obligations of its client if they fail to fulfill their contractual obligations. In this article, we present a sample bank guarantee (promise) in English.
Date: [Insert Date]
To: [Insert Beneficiary Name/Affiliate]
From: [Insert Bank's Name and Address]
The bank guarantee involves three parties:
1. Applicant: The party requesting the bank guarantee (customer/client).
2. Beneficiary/Counterparty: The individual/company receiving the guarantee to secure payment.
3. Issuing Bank: The financial institution providing the guarantee on behalf of the applicant.
[Insert Applicant's Name] has entered into a commercial agreement with [Insert Beneficiary's Name]. To ensure the execution of this agreement, the applicant seeks a bank guarantee from [Insert Bank's Name] to secure future payment obligations as per the terms and conditions outlined in their agreement.
[Insert Bank's Name], hereby guarantees on behalf of [Insert Applicant's Name], unconditional and irrevocable payment of up to [Insert Guarantee Amount] dollars or its equivalent in [Insert Currency] to [Insert Beneficiary's Name] within [Insert Number] days upon receipt of an authenticated written demand. The guarantee is valid until [Insert Expiry Date] unless canceled earlier.
This bank guarantee is subject to the laws and regulations of [Insert Applicable Jurisdiction]. Any disputes arising from this guarantee will be settled by competent courts within [Insert Applicable Jurisdiction].
By issuing this guarantee, [Insert Bank's Name] affirms its commitment to fulfilling its obligations as per the terms and conditions outlined in this bank guarantee document.
[Insert Authorized Signatory]
[Insert Official Designation]
[Insert Bank's Name and Seal]
