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Guarantee Contract

Guarantee Contract Template for United Arab Emirates

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Key Requirements PROMPT example:

Guarantee Contract

"I need a UAE law Guarantee Contract where ABC Construction LLC will guarantee its subsidiary XYZ Contractors LLC's performance obligations under a Dubai construction project worth AED 50 million, with the guarantee period running until March 2025."

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Document background
The Guarantee Contract is a crucial legal instrument in UAE business transactions, commonly used to secure various commercial and financial obligations. This document type is governed by the UAE Civil Code and related commercial legislation, requiring careful consideration of local legal requirements and commercial practices. A Guarantee Contract becomes necessary when a party requires additional security for the performance of obligations, whether in the context of loan agreements, construction contracts, commercial transactions, or corporate arrangements. The document typically includes detailed provisions about the guaranteed obligations, enforcement mechanisms, and the scope of the guarantor's liability, all structured to ensure compliance with UAE legal requirements and market practices. It's particularly relevant in scenarios involving corporate groups, financial institutions, or major commercial transactions where additional security is required for business obligations.
Suggested Sections

1. Parties: Identification of the Guarantor, Beneficiary (creditor), and Principal Debtor

2. Background: Context of the guarantee, including reference to the principal debt or obligation being guaranteed

3. Definitions: Key terms used throughout the guarantee agreement

4. Guarantee and Indemnity: Core provisions setting out the guarantee obligations and indemnity

5. Scope of Guarantee: Detailed description of what is being guaranteed, including amount and duration

6. Nature of Guarantee: Specification that the guarantee is unconditional, irrevocable, and continuing

7. Guarantor's Obligations: Detailed obligations of the guarantor, including payment terms and conditions

8. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

9. Preservation of Rights: Beneficiary's rights preservation and ability to enforce

10. Payments: Payment mechanisms, currency, and treatment of taxes

11. Costs and Expenses: Allocation of costs related to preparation and enforcement

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of UAE law governance and jurisdiction for disputes

Optional Sections

1. Corporate Authority: Required for corporate guarantors, including board resolutions and constitutional documents

2. Security: Include when the guarantee is secured by specific assets

3. Multiple Guarantors: Required when there is more than one guarantor, addressing joint and several liability

4. Assignment and Transfer: Include if parties want to allow transfer of guarantee rights

5. Bank Details: Required for bank guarantees or when specific payment mechanisms are needed

6. Language: Required when dual language versions are used, specifying prevailing language

7. Limitations on Liability: Optional caps or limitations on the guarantor's liability

8. Step-In Rights: Include when guarantor has rights to step into underlying contract

Suggested Schedules

1. Form of Demand: Template for making demands under the guarantee

2. Guaranteed Obligations: Detailed description of the underlying obligations being guaranteed

3. Corporate Authorizations: Copies of relevant board resolutions and powers of attorney

4. Payment Schedule: If applicable, schedule of guaranteed payments or obligations

5. Security Details: If applicable, details of any security provided in support of the guarantee

6. Principal Contract: Copy or key terms of the underlying contract being guaranteed

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
Relevant Industries

Banking and Financial Services

Construction and Real Estate

Manufacturing

Trading and Commerce

Oil and Gas

Telecommunications

Infrastructure Development

Retail

Hospitality

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Commercial

Credit

Operations

Corporate Secretariat

Business Development

Project Management

Relevant Roles

Chief Financial Officer

Legal Counsel

Corporate Lawyer

Finance Director

Treasury Manager

Risk Manager

Commercial Director

Compliance Officer

Contract Manager

Company Secretary

Credit Manager

Business Development Manager

Project Manager

Operations Director

Industries
UAE Civil Code (Federal Law No. 5 of 1985): Primary legislation governing guarantees and suretyship (Articles 1056-1106), including formation requirements, obligations of guarantor, rights of guarantor, and termination of guarantee
UAE Commercial Transactions Law (Federal Law No. 18 of 1993): Governs commercial guarantees and related commercial transactions, including specific provisions for commercial paper and banking operations
UAE Central Bank Regulations: Regulations governing bank guarantees and financial institution guarantees, including requirements for form, content, and execution of bank guarantees
UAE Commercial Companies Law (Federal Law No. 2 of 2015): Relevant for corporate guarantees and guarantees involving company obligations, including requirements for corporate authority to issue guarantees
UAE Electronic Transactions and Commerce Law (Federal Law No. 1 of 2006): Relevant if the guarantee is to be executed or transmitted electronically, governing electronic signatures and documents
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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