A Performance Guarantee Bond is a crucial financial security instrument commonly used in commercial and construction projects in Austria. It provides assurance to project owners or employers that they will be compensated if a contractor fails to perform their contractual obligations. The document is structured according to Austrian legal requirements, particularly the ABGB and UGB, and typically includes details of the underlying contract, the guaranteed amount, validity period, and specific conditions for making a demand. The guarantee can be either conditional or unconditional, depending on the agreed terms, and must comply with Austrian banking regulations when issued by financial institutions. Performance Guarantee Bonds are particularly important in large-scale projects where the financial exposure and performance risks are significant.
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1. Parties: Identification of the Guarantor (typically a bank or financial institution), the Beneficiary, and the Principal Debtor
2. Background: Brief description of the underlying contract or obligation being guaranteed and the purpose of the guarantee
3. Definitions: Key terms used in the guarantee including 'Guaranteed Obligations', 'Maximum Liability Amount', 'Expiry Date', etc.
4. Guarantee: Core guarantee provision specifying the guarantor's undertaking to pay upon demand
5. Maximum Liability Amount: Specification of the maximum amount payable under the guarantee
6. Duration and Validity: Term of the guarantee, including effective date and expiry conditions
7. Demand Requirements: Formal requirements for making a valid demand under the guarantee
8. Payment Terms: Timeframe and method for payment following a valid demand
9. Governing Law and Jurisdiction: Specification of Austrian law as governing law and jurisdiction details
1. Multiple Guarantors: Required when there is more than one guarantor, specifying joint and several liability
2. Conditions Precedent: Used in conditional guarantees where specific conditions must be met before the guarantee can be called
3. Transfer and Assignment: Include when the guarantee needs to be transferable or assignable
4. Counter-Indemnity: Used when the Principal Debtor must indemnify the Guarantor
5. Language Provisions: Required for international guarantees where multiple languages may be used
6. Notices: Detailed notice provisions for formal communications, required for more complex guarantee structures
7. Amendments: Procedures for modifying the guarantee, needed for longer-term or complex guarantees
1. Form of Demand: Template for making a valid demand under the guarantee
2. Underlying Contract Details: Summary or extract of the principal contract being guaranteed
3. Authorized Signatories: List of persons authorized to make demands under the guarantee
4. Bank Account Details: Payment instructions and account details for guarantee payments
5. Form of Reduction Certificate: If applicable, template for reducing the guarantee amount over time
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