Document background
A Contract Performance Guarantee is commonly used in commercial transactions where one party seeks assurance of the other party's performance. Under English and Welsh law, these guarantees provide security against non-performance or default of contractual obligations. They are particularly common in construction, infrastructure, and large-scale commercial projects where the financial consequences of non-performance can be significant. The guarantee typically specifies the maximum liability amount, conditions for calling the guarantee, and the mechanism for making claims. It serves as a risk management tool, providing the beneficiary with immediate access to funds without having to prove actual losses.
