All Countries
Banking
Performance Letter Of Guarantee

Performance Letter Of Guarantee Template for Saudi Arabia

Create a bespoke document in minutes,  or upload and review your own.

4.6 / 5
4.8 / 5

Let's create your Performance Letter Of Guarantee

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Get your first 2 documents free

Your data doesn't train Genie's AI

You keep IP ownership of your information

Key Requirements PROMPT example:

Performance Letter Of Guarantee

"I need a Performance Letter of Guarantee for a 50 million SAR construction project in Riyadh, with multiple beneficiaries (three joint venture partners), valid from March 1, 2025, to December 31, 2025, with the guarantee amount reducing by 25% at each project milestone completion."

Celebrated by
Collaborations with
Investors
Document background
A Performance Letter of Guarantee is commonly used in Saudi Arabian business transactions where one party (the principal) needs to provide financial security to another party (the beneficiary) regarding their performance obligations. This document is particularly crucial in construction projects, government contracts, and large commercial transactions. The Performance Letter of Guarantee must comply with Saudi Arabian Monetary Authority (SAMA) regulations and Sharia law principles, making it distinct from conventional guarantees used in other jurisdictions. It typically specifies the guaranteed amount, validity period, claiming conditions, and expiry terms. The document serves as a risk management tool, providing beneficiaries with immediate access to funds if the principal defaults on their obligations, while ensuring the transaction remains compliant with Islamic banking principles.
Suggested Sections

1. Bank Details and Reference: Issuing bank's details, letter reference number, and date of issuance

2. Beneficiary Information: Complete details of the party in whose favor the guarantee is issued

3. Principal Information: Complete details of the party on whose behalf the guarantee is being issued

4. Guarantee Amount: The specific amount of the guarantee in both numbers and words, including currency

5. Project/Contract Reference: Details of the underlying project or contract for which the guarantee is being issued

6. Guarantee Terms: Core terms including validity period, conditions for calling the guarantee, and payment obligations

7. Expiry Conditions: Specific conditions regarding the expiry or termination of the guarantee

8. Claim Procedure: Process and requirements for making a claim under the guarantee

9. Governing Law Statement: Clear statement that the guarantee is governed by Saudi law and Sharia principles

Optional Sections

1. Multiple Beneficiary Clause: Required when the guarantee is issued in favor of multiple beneficiaries

2. Assignment Clause: Include when the guarantee needs to be transferable

3. Reduction Clause: Include when the guarantee amount can be reduced in stages based on project completion

4. Force Majeure Provisions: Optional clause addressing extraordinary circumstances that may affect the guarantee

5. Language Provision: Required when the guarantee is issued in multiple languages

6. SAMA Compliance Statement: Additional statement required for certain types of government or large-scale project guarantees

Suggested Schedules

1. Payment Schedule: If applicable, schedule of reduction in guarantee amount over time

2. Form of Demand: Prescribed format for making a claim under the guarantee

3. Contract Extract: Relevant excerpts from the underlying contract requiring the performance guarantee

4. Authorization Documents: Copies of corporate authorizations and powers of attorney for signatories

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Clauses
Guarantee Amount and Currency
Duration and Validity
Demand Requirements
Payment Terms
Expiry Conditions
Assignment Rights
Force Majeure
Compliance with Sharia
Governing Law
Jurisdiction
Enforcement
Claims Procedure
Bank's Obligations
Beneficiary's Rights
Principal's Obligations
Amendment Provisions
Reduction Terms
Communication Methods
Default Events
Language Requirements
Multiple Beneficiaries
Dispute Resolution
Bank's Commission
Documentary Requirements
Partial Claims
Return of Guarantee
Notice Requirements
Electronic Communications
Counter Guarantee
Regulatory Compliance
Relevant Industries

Banking and Financial Services

Construction and Infrastructure

Government and Public Sector

Real Estate Development

Energy and Utilities

Manufacturing

Telecommunications

Defense and Security

Healthcare

Education

Relevant Teams

Legal

Finance

Treasury

Procurement

Risk Management

Compliance

Commercial

Project Management

Construction Management

Corporate Banking

Business Development

Relevant Roles

Chief Financial Officer

Project Manager

Contract Manager

Legal Counsel

Treasury Manager

Bank Relationship Manager

Procurement Manager

Risk Manager

Commercial Director

Finance Director

Compliance Officer

Project Director

Construction Manager

Business Development Manager

Corporate Banking Officer

Industries
Banking Control Law (Royal Decree No. M/5): Primary banking legislation in Saudi Arabia that governs banking operations including the issuance of letters of guarantee
Saudi Arabian Monetary Authority (SAMA) Regulations: Regulatory framework governing banking operations and financial instruments, including specific provisions for letters of guarantee and their format
Commercial Courts Law (Royal Decree No. M/93): Governs commercial disputes and enforcement of commercial contracts, including those related to letters of guarantee
Government Tenders and Procurement Law (Royal Decree No. M/128): Relevant when the performance guarantee is related to government contracts, specifying requirements for bid and performance bonds
Islamic Banking Regulations: Sharia-compliant principles governing banking transactions and guarantees, ensuring compliance with Islamic finance requirements
Civil Transactions Law: Provides general principles for contracts and obligations in Saudi Arabia, including those related to guarantees and securities
Enforcement Law (Royal Decree No. M/53): Governs the enforcement of financial documents and guarantees, including mechanisms for claiming against letters of guarantee
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

Find the exact document you need

On Demand Bank Guarantee

A Saudi Arabian law-governed bank guarantee providing immediate payment upon demand, subject to SAMA regulations and Shariah principles.

find out more

Bank Endorsement Letter

A formal banking document issued under Saudi Arabian banking regulations that provides official bank endorsement or confirmation regarding a customer's banking relationship or specific transaction.

find out more

Advance Payment Guarantee Letter

A bank-issued guarantee document under Saudi Arabian law that secures advance payments made to contractors or suppliers, ensuring repayment if contractual obligations are not met.

find out more

Retention Bank Guarantee

A Saudi Arabian bank guarantee document that replaces cash retention in construction contracts, governed by Saudi law and Shariah principles.

find out more

Performance Standby Letter Of Credit

A bank-issued guarantee instrument under Saudi Arabian law that secures performance obligations through an irrevocable payment undertaking upon default.

find out more

Payment Guarantee Letter To Supplier

A Shariah-compliant banking instrument under Saudi Arabian law where a bank guarantees payment to a supplier on behalf of a buyer.

find out more

Conditional Bank Guarantee

A Saudi Arabian law-compliant financial instrument where a bank guarantees payment to a beneficiary subject to specific conditions, conforming to SAMA regulations and Shariah principles.

find out more

Bank Guarantee Performance Bond

A Shariah-compliant bank guarantee under Saudi Arabian law that secures a contractor's performance obligations to a project owner, payable on first demand.

find out more

Performance Letter Of Guarantee

A Saudi Arabia-governed financial instrument where a bank guarantees payment to a beneficiary if a principal fails to meet contractual obligations, following SAMA regulations and Sharia principles.

find out more

Standby Letter Of Credit

A Saudi Arabian law-governed contingent payment instrument issued by a bank as a guarantee of payment or performance, structured to comply with local banking regulations and Shariah principles.

find out more

Cash Backed Bank Guarantee

A Saudi Arabian law-governed bank guarantee document detailing terms for a guarantee backed by cash collateral, compliant with local banking regulations and Shariah principles.

find out more

Bank Counter Guarantee

A Saudi Arabian law-governed banking instrument where one bank guarantees another bank's obligations under a primary guarantee, subject to SAMA regulations and Sharia compliance.

find out more

Back To Back Bank Guarantee

A Sharia-compliant Back-to-Back Bank Guarantee under Saudi Arabian law, establishing a counter-guarantee relationship between two banks for supporting an underlying guarantee transaction.

find out more

Bid Bond Tender Guarantee

A Saudi Arabian bank-issued guarantee securing a bidder's commitment to honor their tender submission and proceed with the contract if selected, subject to GTPL and Shariah law.

find out more

Bank Letter Of Comfort

A Saudi Arabian banking document providing assurance about a client's financial standing and relationship with the bank, compliant with both SAMA regulations and Shariah principles.

find out more

Performance Bank Guarantee

A bank-issued guarantee document under Saudi Arabian law that secures the performance obligations of one party to another, providing financial protection against non-performance.

find out more

Download our whitepaper on the future of AI in Legal

By providing your email address you are consenting to our Privacy Notice.
Thank you for downloading our whitepaper. This should arrive in your inbox shortly. In the meantime, why not jump straight to a section that interests you here: https://www.genieai.co/our-research
Oops! Something went wrong while submitting the form.

Genie’s Security Promise

Genie is the safest place to draft. Here’s how we prioritise your privacy and security.

Your documents are private:

We do not train on your data; Genie’s AI improves independently

All data stored on Genie is private to your organisation

Your documents are protected:

Your documents are protected by ultra-secure 256-bit encryption

Our bank-grade security infrastructure undergoes regular external audits

We are ISO27001 certified, so your data is secure

Organizational security

You retain IP ownership of your documents

You have full control over your data and who gets to see it

Innovation in privacy:

Genie partnered with the Computational Privacy Department at Imperial College London

Together, we ran a £1 million research project on privacy and anonymity in legal contracts

Want to know more?

Visit our Trust Centre for more details and real-time security updates.

Read our Privacy Policy.