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Performance Guarantee Agreement

Performance Guarantee Agreement Template for Ireland

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Key Requirements PROMPT example:

Performance Guarantee Agreement

"I need a Performance Guarantee Agreement under Irish law where Bank of Ireland will act as guarantor for Dublin Construction Ltd's obligations in a €5 million office development project, with the guarantee period running from March 1, 2025, to December 31, 2025."

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Document background
The Performance Guarantee Agreement is a crucial security instrument in commercial transactions under Irish law, commonly utilized in construction projects, service contracts, and major commercial undertakings. It provides beneficiaries with financial assurance against non-performance or default by the principal obligor. The document typically specifies the guaranteed amount, validity period, conditions for making demands, and payment terms. Used primarily when significant financial exposure exists or when required by regulatory or contractual obligations, this agreement must comply with Irish legislation, including the Statute of Frauds and financial services regulations. The guarantee can be called upon following specified trigger events, such as contractual breach or default, providing an efficient mechanism for risk mitigation and project security.
Suggested Sections

1. Parties: Identifies the Guarantor, the Beneficiary, and the Principal Obligor (the party whose performance is being guaranteed)

2. Background: Describes the underlying transaction or obligation being guaranteed and the purpose of the guarantee

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Guarantee and Indemnity: Sets out the core guarantee obligations, including the scope and amount of the guarantee

5. Duration and Validity: Specifies the effective period of the guarantee and any conditions affecting its validity

6. Demands and Payments: Details the process for making demands under the guarantee and how payments should be made

7. Guarantor's Obligations: Specifies the nature and extent of the guarantor's obligations and any limitations

8. Representations and Warranties: Contains statements of fact and assurances made by the guarantor

9. Preservation of Rights: Establishes that the beneficiary's rights are preserved despite any changes to the underlying obligation

10. Costs and Expenses: Allocates responsibility for costs associated with the guarantee

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

12. Governing Law and Jurisdiction: Confirms Irish law as governing law and specifies jurisdiction for disputes

Optional Sections

1. Step-In Rights: Used in construction or project contracts to allow the beneficiary to take over the project upon default

2. Counter-Indemnity: Include when the principal obligor provides indemnity to the guarantor

3. Multiple Guarantors: Required when there is more than one guarantor, defining joint and several liability

4. Assignment and Transfer: Include if parties need the right to assign or transfer their rights under the guarantee

5. Currency Provisions: Necessary for international guarantees involving multiple currencies

6. Tax Gross-Up: Include when payments might be subject to withholding tax

7. Force Majeure: Optional clause defining circumstances that might excuse performance

8. Anti-Money Laundering Provisions: Include for financial institutions or when required by regulatory compliance

Suggested Schedules

1. Form of Demand: Template for making valid demands under the guarantee

2. Guaranteed Obligations: Detailed description of the obligations being guaranteed

3. Payment Details: Banking and account information for payments under the guarantee

4. Underlying Contract: Copy or summary of the contract being guaranteed

5. Corporate Authorizations: Copies of relevant corporate approvals and authorizations

6. Conditions Precedent: List of documents and conditions required before the guarantee becomes effective

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Authorized Representative
Beneficiary
Business Day
Claim
Commencement Date
Conditions Precedent
Default
Demand
Effective Date
Event of Default
Expiry Date
Form of Demand
Guarantee Amount
Guarantee Period
Guaranteed Obligations
Guarantor
Interest Rate
Law
Material Adverse Effect
Notice
Parties
Payment Date
Performance Obligations
Principal Obligor
Project
Related Rights
Security
Specified Currency
Termination Date
Trigger Event
Underlying Contract
Valid Demand
Working Day
Relevant Industries

Construction

Infrastructure

Financial Services

Real Estate Development

Energy

Manufacturing

Engineering

Technology

Telecommunications

Public Sector

Transportation

Utilities

Relevant Teams

Legal

Finance

Risk Management

Commercial

Procurement

Operations

Compliance

Treasury

Project Management

Business Development

Relevant Roles

Legal Counsel

Contract Manager

Project Manager

Risk Manager

Commercial Director

Finance Director

Compliance Officer

Construction Manager

Procurement Manager

Business Development Manager

Operations Director

Chief Financial Officer

Company Secretary

Treasury Manager

Industries
Statute of Frauds (Ireland) 1695: Requires guarantees to be in writing and signed to be enforceable. This is fundamental for the validity of any guarantee agreement.
Civil Law (Miscellaneous Provisions) Act 2011: Contains provisions affecting contract law and commercial relationships in Ireland, including aspects of guarantee enforcement.
European Communities (Unfair Terms in Consumer Contracts) Regulations 1995: Relevant if the guarantee involves consumer contracts, protecting against unfair terms in contracts.
Central Bank Act 1997: Regulates financial institutions providing guarantees and sets out requirements for financial service providers.
Limitation Act 1957: Sets time limits for enforcement of contractual rights, including those under guarantees.
Companies Act 2014: Relevant for corporate guarantees, including provisions on company capacity to give guarantees and directors' duties.
Consumer Protection Act 2007: Provides protection for consumers in commercial transactions, including guarantees and warranties.
European Union (Consumer Protection Cooperation) Regulations 2020: Implements EU regulations on cross-border consumer protection, relevant for international guarantee agreements.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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