Guarantee Cheque Against Advance Payment for United Arab Emirates

Guarantee Cheque Against Advance Payment Template for United Arab Emirates

A legally binding document governed by UAE law that establishes the terms and conditions for an advance payment secured by a guarantee cheque. This document details the amount and purpose of the advance payment, specifies the guarantee cheque particulars, and outlines the conditions under which the cheque may be presented for payment. It incorporates relevant provisions from UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) and UAE Federal Decree Law No. 14 of 2020, ensuring compliance with UAE banking regulations and commercial practices regarding cheque transactions and advance payments.

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What is a Guarantee Cheque Against Advance Payment?

The Guarantee Cheque Against Advance Payment document is widely used in UAE business transactions where one party needs to make an advance payment while securing their interests through a guarantee cheque. This arrangement is particularly common in sectors requiring significant upfront payments, such as construction, trading, and services. The document becomes necessary when businesses need to establish clear terms for advance payments while maintaining security through a legally enforceable guarantee cheque mechanism. It includes comprehensive details about the advance payment, the guarantee cheque specifications, conditions for presentation, and remedies in case of default, all structured in compliance with UAE Federal Laws and banking regulations. This document type is especially relevant given the UAE's strict legal framework regarding cheques and their use as security instruments.

What sections should be included in a Guarantee Cheque Against Advance Payment?

1. Parties: Identification of all parties involved, including full legal names, addresses, and registration details for companies

2. Background: Context of the agreement, including the purpose of the advance payment and the need for the guarantee cheque

3. Definitions: Key terms used throughout the agreement, including 'Advance Payment', 'Guarantee Cheque', 'Project' (if applicable), and other relevant terms

4. Advance Payment Details: Specific details of the advance payment including amount, purpose, and payment schedule

5. Guarantee Cheque Details: Complete details of the guarantee cheque including cheque number, amount, date, and drawee bank

6. Terms and Conditions: Conditions for presenting and cashing the cheque, including triggers and notice requirements

7. Representations and Warranties: Declarations by both parties regarding their authority, solvency, and validity of the cheque

8. Default and Remedies: Consequences of default and available remedies for both parties

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

What sections are optional to include in a Guarantee Cheque Against Advance Payment?

1. Project Milestones: Used when the advance payment is linked to specific project deliverables or milestones

2. Additional Security: Include when other forms of security are provided alongside the guarantee cheque

3. Bank Guarantee: Required when a bank guarantee is provided in addition to or instead of a personal/corporate guarantee

4. Return of Guarantee Cheque: Include when specific conditions for returning the guarantee cheque need to be detailed

5. Force Majeure: Include when parties want to address circumstances that might affect the execution of the underlying contract

What schedules should be included in a Guarantee Cheque Against Advance Payment?

1. Schedule 1 - Cheque Details: Detailed information about the guarantee cheque including copy of the cheque

2. Schedule 2 - Advance Payment Schedule: Breakdown of advance payment amounts and dates if paid in installments

3. Schedule 3 - Project Details: Details of the project or services for which advance payment is being made

4. Appendix A - Required Documents: List of supporting documents required from both parties

5. Appendix B - Contact Details: Contact information for authorized representatives of both parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant Industries

Construction

Real Estate Development

Manufacturing

Trading

Professional Services

Technology Services

Engineering

Contracting

Industrial Services

Project Development

Infrastructure

Relevant Teams

Legal

Finance

Treasury

Procurement

Project Management

Risk Management

Operations

Commercial

Accounts Payable

Contract Administration

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Contract Manager

Project Manager

Treasury Manager

Accounts Payable Manager

Procurement Manager

Commercial Director

Risk Manager

Company Secretary

Financial Controller

Operations Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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