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Bond Indemnity Agreement

Bond Indemnity Agreement Template for Nigeria

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Key Requirements PROMPT example:

Bond Indemnity Agreement

"I need a Bond Indemnity Agreement for a construction project in Lagos, Nigeria, where my company will act as indemnitor to secure a performance bond from ABC Insurance Ltd, with the bond value being NGN 500 million and the agreement needed by March 2025."

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Document background
The Bond Indemnity Agreement is a critical document in Nigerian commercial practice, particularly used when companies need to obtain bonds or guarantees for major projects or contracts. This agreement is essential for businesses engaging in government contracts, construction projects, or other ventures where performance bonds, advance payment bonds, or similar securities are required. The Indemnitor (usually the principal company) commits to protecting the Surety (typically an insurance company or bank) from any losses that might arise from claims made against the bond. Under Nigerian law, these agreements must comply with various regulations including the Companies and Allied Matters Act 2020 and relevant financial services legislation. The document typically includes detailed provisions for security arrangements, payment obligations, claims procedures, and enforcement mechanisms.
Suggested Sections

1. Parties: Identification of the Indemnitor(s), the Surety/Bond Company, and the Obligee

2. Background: Context of the bond requirement, underlying obligation, and purpose of the indemnity

3. Definitions: Key terms used throughout the agreement including 'Bond', 'Principal', 'Loss', 'Claims', etc.

4. Indemnification Obligations: Core obligations of the Indemnitor to indemnify and hold harmless the Surety

5. Scope of Indemnity: Extent of indemnification including losses, costs, expenses, and legal fees

6. Security and Collateral: Requirements for security or collateral to support the indemnity obligation

7. Payment and Reimbursement: Terms for payment timing, method, and reimbursement procedures

8. Rights of the Surety: Surety's rights regarding settlement, defense of claims, and access to information

9. Representations and Warranties: Statements of fact and guarantees by the Indemnitor

10. Duration and Termination: Term of the agreement and conditions for termination

11. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

12. Notices: Process and requirements for formal communications between parties

13. Execution: Signature blocks and execution requirements

Optional Sections

1. Assignment: Include when transfer rights need to be addressed, particularly for corporate Indemnitors

2. Joint and Several Liability: Required when multiple Indemnitors are involved

3. Power of Attorney: Include when Surety requires authority to act on behalf of Indemnitor

4. Financial Statements: Include when ongoing financial reporting requirements are needed

5. Corporate Authorization: Required when Indemnitor is a corporate entity

6. Confidentiality: Include when sensitive commercial information is involved

7. Force Majeure: Optional clause for circumstances beyond parties' control

8. Amendment Procedure: Include when specific amendment processes need to be defined

Suggested Schedules

1. Schedule 1 - Bond Details: Specific details of the bond(s) being indemnified including amount, type, and beneficiary

2. Schedule 2 - Security Details: Description of any security or collateral provided

3. Schedule 3 - Fee Schedule: Details of any fees, premiums, or charges

4. Schedule 4 - Claims Procedure: Detailed process for handling and responding to claims

5. Appendix A - Form of Notice: Standard template for formal notices under the agreement

6. Appendix B - Corporate Authority Documents: Required corporate resolutions and authorizations

7. Appendix C - Specimen Signatures: Authorized signatures for all parties

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 Industries

Construction

Infrastructure Development

Oil and Gas

Mining

Manufacturing

Real Estate Development

Government Contracting

Transportation

Energy

Telecommunications

Financial Services

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Commercial

Operations

Project Management

Business Development

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Legal Counsel

Contract Manager

Risk Manager

Project Director

Treasury Manager

Financial Controller

Commercial Director

Compliance Officer

Company Secretary

Business Development Manager

Operations Director

Credit Risk Officer

Industries
Nigerian Contract Law: Derived from Common Law principles, governs the formation, validity, and enforcement of contracts, including essential elements like offer, acceptance, consideration, and capacity to contract
Companies and Allied Matters Act (CAMA) 2020: Regulates the formation and operation of companies in Nigeria, including their capacity to enter into contracts and provide indemnities
Investments and Securities Act 2007: Governs securities and investments in Nigeria, including regulations regarding bonds and other financial instruments
Recovery of Debts (Banks and Financial Institutions) Act: Provides framework for debt recovery and enforcement of security interests in Nigeria
Stamp Duties Act: Requires certain documents, including bond agreements, to be properly stamped to be admissible as evidence in court
Money Laundering (Prohibition) Act 2011: Ensures compliance with anti-money laundering regulations in financial transactions and agreements
Evidence Act 2011: Governs the admissibility of documents and evidence in Nigerian courts, relevant for enforcement of the agreement
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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