Irrevocable And Unconditional Bank Guarantee for Pakistan

Irrevocable And Unconditional Bank Guarantee Template for Pakistan

An Irrevocable and Unconditional Bank Guarantee is a financial instrument issued under Pakistani law where a bank provides an absolute commitment to pay a specified sum to a beneficiary upon demand, without any conditions or proof of default. This document, governed by Pakistani banking regulations and contract law, represents a primary obligation of the bank that cannot be revoked during its validity period. It serves as a powerful form of security in commercial transactions, with the bank being obligated to honor the guarantee regardless of any disputes in the underlying transaction between the principal and beneficiary.

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What is a Irrevocable And Unconditional Bank Guarantee?

The Irrevocable And Unconditional Bank Guarantee is a crucial financial instrument in Pakistani commercial transactions, commonly used to secure contractual obligations, tender participations, advance payments, or performance commitments. It is governed by Pakistani banking laws, particularly the Banking Companies Ordinance 1962 and relevant State Bank of Pakistan regulations. This document is essential when a party requires absolute payment security, as it represents a bank's unconditional commitment to pay upon first demand, without requiring proof of default or allowing any defenses. The guarantee's irrevocable nature means it cannot be cancelled or modified without the beneficiary's consent during its validity period, providing robust protection in high-value commercial transactions.

What sections should be included in a Irrevocable And Unconditional Bank Guarantee?

1. Bank Details and Reference Number: Information identifying the issuing bank and unique guarantee reference number

2. Date: Date of issuance of the bank guarantee

3. Beneficiary Details: Complete details of the party in whose favor the guarantee is being issued

4. Account Party Details: Complete details of the party on whose behalf the guarantee is being issued

5. Guarantee Amount: The maximum amount guaranteed, expressed in both figures and words

6. Purpose of Guarantee: Clear statement of the underlying transaction or obligation being guaranteed

7. Validity Period: Specific start and end dates of the guarantee

8. Unconditional Declaration: Express statement confirming the unconditional nature of the guarantee

9. Invocation Procedure: Clear process for making a claim under the guarantee

10. Payment Terms: Timeframe and method for payment upon invocation

11. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and relevant jurisdiction

12. Bank's Undertaking: Formal commitment by the bank to honor the guarantee

What sections are optional to include in a Irrevocable And Unconditional Bank Guarantee?

1. Counter Guarantee Reference: Required when the guarantee is issued based on a counter-guarantee from another bank

2. Claim Limitation Clause: Optional clause limiting the number of claims that can be made under the guarantee

3. Force Majeure Provisions: Optional clause addressing extraordinary circumstances that might affect the guarantee

4. Assignment Restrictions: Optional clause restricting or permitting the assignment of rights under the guarantee

5. Language Declaration: Required when the guarantee is issued in multiple languages, specifying which version prevails

6. Islamic Banking Compliance: Required when the guarantee needs to comply with Islamic banking principles

7. Stamp Duty Declaration: Required in certain jurisdictions within Pakistan where specific stamp duty requirements apply

What schedules should be included in a Irrevocable And Unconditional Bank Guarantee?

1. Schedule A - Form of Demand: Standard format for making a claim under the guarantee

2. Schedule B - Supporting Documents: List of documents required to be submitted with any claim

3. Schedule C - Communication Details: Complete contact information and authorized representatives of all parties

4. Appendix 1 - Underlying Contract Reference: Details of the primary contract or obligation being guaranteed

5. Appendix 2 - Special Instructions: Any specific requirements or conditions for guarantee operation

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

Jurisdiction

Pakistan

Publisher

Genie AI

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant Industries

Banking & Financial Services

Construction & Infrastructure

International Trade

Manufacturing

Real Estate

Energy & Utilities

Telecommunications

Government & Public Sector

Defense

Mining & Resources

Retail & Commerce

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Procurement

Commercial Operations

Compliance

Trade Finance

Credit

Business Development

Project Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Bank Relationship Manager

Credit Risk Manager

Commercial Director

Procurement Manager

Contract Manager

Legal Counsel

Company Secretary

Business Development Manager

Project Manager

Trade Finance Manager

Financial Controller

Compliance Officer

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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