Non Financial Guarantee Template for Malaysia

The Non-Financial Guarantee is a crucial commercial document used in Malaysian business transactions where parties seek assurance for the performance of non-monetary obligations. It is commonly utilized in situations requiring performance guarantees, technical warranties, or operational commitments, particularly in construction, manufacturing, and service delivery contexts. The document, governed by Malaysian law including the Contracts Act 1950 and the Specific Relief Act 1950, establishes the Guarantor's commitment to ensure the Principal's performance or provide specified remedies upon default. This type of guarantee differs from financial guarantees as it focuses on operational or performance obligations rather than monetary commitments. It includes specific provisions for demand mechanisms, scope of guaranteed obligations, and enforcement procedures, tailored to comply with Malaysian legal requirements and commercial practices.

1. Parties: Identifies and defines the Guarantor, Principal (the party whose obligations are being guaranteed), and Beneficiary

2. Background: Sets out the context of the guarantee, including reference to the primary obligation being guaranteed

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

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and indemnification provisions

5. Scope of Guarantee: Defines the exact obligations covered by the guarantee

6. Duration: Specifies the term of the guarantee and any conditions for extension or termination

7. Demands and Payments: Sets out the process for making demands under the guarantee and how payments should be made

8. Representations and Warranties: Standard representations and warranties from the Guarantor

9. Continuing Security: Establishes that the guarantee remains in force until obligations are fully discharged

10. Preservation of Rights: Protects the Beneficiary's rights under the guarantee in various circumstances

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

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