Document background
The Construction Bank Guarantee is a crucial document in UAE construction projects, required whenever significant financial assurance is needed between contracting parties. This guarantee, governed by UAE Federal Law No. 18 of 1993 and UAE Central Bank regulations, serves multiple purposes including bid bonds, performance guarantees, advance payment guarantees, and retention bonds. The document is typically issued by a UAE-licensed bank and provides the beneficiary with a direct, unconditional right to claim payment up to the guaranteed amount upon the contractor's default or non-performance. The Construction Bank Guarantee must include specific elements required by UAE law, such as clear identification of parties, precise guarantee amount, validity period, and claim procedures. It's particularly important in the UAE construction sector where such guarantees are mandatory for most government contracts and major private sector projects.
