Performance Bank Guarantee In Tender Template for Hong Kong

The Performance Bank Guarantee In Tender is a crucial document in Hong Kong's commercial landscape, particularly in competitive bidding processes. It is required when organizations participate in significant tenders where the tender issuer needs security against potential default or withdrawal by bidders. The guarantee typically amounts to 1-5% of the tender value and remains valid throughout the tender period plus an additional buffer period. This document, governed by Hong Kong law, includes specific details about the tender, parties involved, guarantee amount, validity period, and claim conditions. It serves as a risk mitigation tool for tender issuers while demonstrating the bidder's financial capability and commitment to the tender process.

1. Parties: Identifies the Bank (Guarantor), the Principal (Tenderer), and the Beneficiary (typically the organization issuing the tender)

2. Background: States the context of the tender and the requirement for the guarantee

3. Definitions: Defines key terms used throughout the guarantee document

4. Guarantee Amount: Specifies the maximum amount of the guarantee and the currency

5. Scope of Guarantee: Details what the guarantee covers in relation to the tender process

6. Duration and Validity: Specifies the effective date, expiry date, and any automatic extension conditions

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

8. Payment Terms: Specifies how and when payment will be made upon valid demand

9. Bank's Rights and Obligations: Outlines the extent and limitations of the bank's responsibilities

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

11. Notices: Details how formal communications between parties should be made