Bid Bond Bank Guarantee Template for Hong Kong

The Bid Bond Bank Guarantee is a critical document in Hong Kong's competitive tender processes, particularly for large-scale projects and government contracts. It serves as a risk mitigation tool for tender issuers, ensuring that only serious bidders participate in the tender process. The guarantee typically amounts to 1-5% of the bid value and remains valid throughout the tender period plus an additional buffer time. When drafting a Bid Bond Bank Guarantee under Hong Kong law, specific attention must be paid to local banking regulations, the Banking Ordinance, and established market practices. The document must clearly state the conditions for demand, validity period, and payment obligations, while ensuring compliance with Hong Kong's legal framework for banking and security instruments.

1. Parties: Identifies the three key parties: the Bank (Guarantor), the Bidder (Principal), and the Entity calling for bids (Beneficiary)

2. Background: States the tender details, bidder's participation, and requirement for a bid bond

3. Definitions: Defines key terms used in the guarantee including 'Tender', 'Bid Amount', 'Guarantee Amount', etc.

4. Guarantee: Core section specifying the bank's unconditional obligation to pay the guarantee amount

5. Guarantee Amount: Specifies the exact amount of the guarantee, typically a percentage of the bid amount

6. Validity Period: States the effective period of the guarantee, including start and expiry dates

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

8. Payment Terms: Details the payment procedure upon receipt of a valid demand

9. Expiry and Return: Conditions for guarantee expiry and return of the original document

10. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and relevant jurisdiction