Performance Bond Guarantee Template for Switzerland

The Performance Bond Guarantee is a crucial financial security instrument commonly used in commercial and construction projects to protect against non-performance or default by a contractor or supplier. Under Swiss law, these guarantees must comply with specific requirements set out in the Swiss Code of Obligations, particularly regarding form and content. The document typically specifies a maximum guarantee amount, usually a percentage of the contract value, and includes detailed provisions for making claims, payment terms, and validity periods. Performance Bond Guarantees are particularly important in large-scale projects where the financial consequences of non-performance can be significant. The guarantee provides the beneficiary with direct recourse to the guarantor (usually a bank or insurance company) without first having to pursue the principal debtor, making it an efficient security instrument in commercial transactions.

1. Parties: Identification of the Guarantor (typically a bank or insurance company), the Principal (the party whose performance is guaranteed), and the Beneficiary

2. Background: Brief description of the underlying contract or obligation being guaranteed and the context of the guarantee

3. Definitions: Key terms used in the guarantee, including 'Guaranteed Obligations', 'Maximum Liability Amount', and other relevant defined terms

4. Guarantee: Core guarantee provisions, including the specific performance being guaranteed and the maximum guarantee amount

5. Scope of Guarantee: Detailed description of what is covered by the guarantee and any limitations

6. Duration and Validity: Term of the guarantee, including start date and expiry conditions

7. Demand Requirements: Process and conditions for making a claim under the guarantee

8. Payment Terms: Timeline and method for payment upon valid demand

9. Reduction and Release: Conditions under which the guarantee amount may be reduced or the guarantee released

10. Governing Law and Jurisdiction: Confirmation of Swiss law as governing law and jurisdiction for disputes