The Performance Standby Letter of Credit serves as a critical financial security instrument in commercial transactions under Canadian law. It is typically used when one party (the beneficiary) requires security for the performance obligations of another party (the applicant) in a underlying commercial contract. The document provides an independent, irrevocable commitment from a bank to pay a specified amount upon presentation of compliant documents indicating a performance default. This type of letter of credit is particularly valuable in cross-border transactions and major commercial projects where parties seek reliable performance security. The document must comply with Canadian banking regulations, including the Bank Act and relevant provincial laws, while typically incorporating International Standby Practices (ISP98). It includes specific provisions for drawing conditions, expiry terms, and documentary requirements, making it a robust security instrument for commercial transactions.
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1. Letter Header and Date: Bank's letterhead, reference numbers, and date of issuance
2. Beneficiary Details: Full name and address of the party in whose favor the SBLC is issued
3. Applicant Details: Full name and address of the party requesting the SBLC
4. Credit Number: Unique identification number of the SBLC
5. Currency and Amount: Specification of the maximum amount available under the SBLC and currency
6. Underlying Transaction Reference: Reference to the underlying contract or obligation being guaranteed
7. Drawing Terms and Conditions: Specific conditions that must be met for the beneficiary to draw under the SBLC
8. Required Documents: List of documents that must be presented with any drawing request
9. Expiry Details: Expiry date and place of the SBLC
10. Form of Demand: Specific format and content requirements for making a demand under the SBLC
11. Governing Law and Jurisdiction: Specification of applicable law and courts having jurisdiction
12. ISP98 Reference: Statement incorporating International Standby Practices ISP98
1. Partial Drawings Clause: Include when partial drawings are to be permitted under the SBLC
2. Transfer Provisions: Include when the SBLC is to be transferable to other beneficiaries
3. Multiple Beneficiary Provisions: Include when there are multiple beneficiaries
4. Automatic Extension Clause: Include when the SBLC should automatically extend unless notice is given
5. Language Provision: Include when the SBLC might be used in multiple jurisdictions with different languages
6. Electronic Presentation Clause: Include when electronic presentation of documents is acceptable
7. Force Majeure Clause: Include when specific force majeure provisions are required beyond standard ISP98 provisions
1. Form of Demand: Template for the written demand to be submitted by the beneficiary
2. Required Documents Checklist: Detailed checklist of all documents required for drawing under the SBLC
3. Specimen Signatures: Authenticated specimen signatures of authorized signatories
4. Underlying Contract Extract: Relevant extract from the underlying contract referring to the SBLC requirement
5. Bank Contact Details: Complete contact information for the issuing bank's relevant departments
Relevant legal definitions
Advising Bank
Applicant
Banking Day
Beneficiary
Business Day
Complying Presentation
Confirmation
Confirming Bank
Credit
Demand
Documentary Requirements
Drawing
Event of Default
Expiry Date
Governing Law
ISP98
Issue Date
Issuing Bank
Letter of Credit Amount
Nominated Bank
Notice of Default
Original Letter of Credit
Partial Drawing
Performance Default
Performance Obligations
Place for Presentation
Presentation
Principal
Required Documents
Stated Amount
Stated Currency
Stated Expiry Date
Transfer
Transferee
Underlying Contract
Underlying Transaction
Applicant
Banking Day
Beneficiary
Business Day
Complying Presentation
Confirmation
Confirming Bank
Credit
Demand
Documentary Requirements
Drawing
Event of Default
Expiry Date
Governing Law
ISP98
Issue Date
Issuing Bank
Letter of Credit Amount
Nominated Bank
Notice of Default
Original Letter of Credit
Partial Drawing
Performance Default
Performance Obligations
Place for Presentation
Presentation
Principal
Required Documents
Stated Amount
Stated Currency
Stated Expiry Date
Transfer
Transferee
Underlying Contract
Underlying Transaction
Clauses
Party Identification
Credit Amount
Validity Period
Drawing Rights
Payment Terms
Document Presentation
Performance Requirements
Default Events
Notice Requirements
Transfer Rights
Assignment
Force Majeure
Governing Law
Jurisdiction
Banking Days
Document Examination
Amendment Terms
Automatic Extension
Multiple Drawings
Cancellation Rights
Document Authentication
Expiry Conditions
Communication Methods
Compliance Standards
Dispute Resolution
Fees and Charges
Representations and Warranties
Severability
Language
Notices
Credit Amount
Validity Period
Drawing Rights
Payment Terms
Document Presentation
Performance Requirements
Default Events
Notice Requirements
Transfer Rights
Assignment
Force Majeure
Governing Law
Jurisdiction
Banking Days
Document Examination
Amendment Terms
Automatic Extension
Multiple Drawings
Cancellation Rights
Document Authentication
Expiry Conditions
Communication Methods
Compliance Standards
Dispute Resolution
Fees and Charges
Representations and Warranties
Severability
Language
Notices
Relevant Industries
Banking and Financial Services
Construction
International Trade
Manufacturing
Energy and Resources
Infrastructure
Real Estate Development
Engineering and Construction
Mining
Oil and Gas
Telecommunications
Government and Public Sector
Transport and Logistics
Relevant Teams
Legal
Finance
Treasury
Trade Finance
Risk Management
Compliance
Commercial Operations
Project Management
Credit Management
International Banking
Business Development
Relevant Roles
Chief Financial Officer
Treasury Manager
Trade Finance Manager
Commercial Banking Officer
Risk Manager
Contract Manager
Project Manager
Financial Controller
Legal Counsel
Compliance Officer
Credit Manager
Documentary Credits Specialist
International Trade Specialist
Business Development Manager
Commercial Director
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