Document background
The Performance Guarantee Bond serves as a critical risk mitigation tool in commercial transactions under Swiss law. It is typically required in situations where one party needs assurance of another party's performance of contractual obligations, such as in construction projects, supply contracts, or service agreements. The document outlines the guaranteed amount, triggering events for payment, and claim procedures, all structured within Switzerland's legal framework. The guarantee must comply with strict formality requirements under Swiss law, including written form and specific content requirements. This type of bond is particularly valuable in international transactions where Swiss law's reputation for stability and predictability provides additional comfort to the parties involved. The guarantor, usually a bank or financial institution, commits to pay a specified sum to the beneficiary upon demonstration that the principal has failed to meet their obligations under the primary contract.
