Performance Guarantee Agreement Template for Austria

The Performance Guarantee Agreement is a crucial security instrument in Austrian commercial practice, commonly used in construction, infrastructure, and large-scale commercial projects. It provides financial security to project owners or employers by ensuring that a third party (typically a bank or financial institution) will step in to cover losses or complete obligations if the primary contractor fails to perform. Under Austrian law, these guarantees are typically structured as abstract guarantees (abstrakte Garantie), independent from the underlying contract. The document must comply with Austrian Civil Code requirements and banking regulations when issued by financial institutions. This type of agreement is particularly important in international trade and cross-border transactions where Austrian law governs the relationship between parties.

1. Parties: Identification of the Guarantor, the Beneficiary, and the Principal Debtor (the party whose performance is being guaranteed)

2. Background: Context of the underlying obligation and the reason for providing the guarantee

3. Definitions: Definitions of key terms used throughout the agreement, including 'Guaranteed Obligations', 'Guarantee Period', and 'Demand Notice'

4. Guarantee: Core section detailing the scope and nature of the guarantee, including the maximum guaranteed amount

5. Independent Obligation: Establishes that the guarantee is independent from the underlying contract (abstract guarantee)

6. Duration: Specifies the effective period of the guarantee and any conditions for extension or early termination

7. Demand Procedure: Details the process and requirements for making a valid demand under the guarantee

8. Payment Terms: Specifies the timing and method of payment upon receipt of a valid demand

9. Representations and Warranties: Standard representations by the Guarantor regarding capacity and authority

10. No Assignment: Restrictions on transfer or assignment of rights under the guarantee

11. Governing Law and Jurisdiction: Confirmation of Austrian law as governing law and jurisdiction for disputes

12. Notices: Communication requirements and contact details for formal notices

13. Execution: Signature blocks and execution formalities