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Conditional Bank Guarantee

Conditional Bank Guarantee Template for Nigeria

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Key Requirements PROMPT example:

Conditional Bank Guarantee

"I need a Conditional Bank Guarantee under Nigerian law for a construction project in Lagos, where First Bank Nigeria will guarantee NGN 500 million to the Lagos State Government on behalf of ABC Construction Ltd, covering project completion until March 2025."

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Document background
The Conditional Bank Guarantee is a crucial financial instrument in Nigerian commercial transactions, particularly used in large-scale projects, international trade, and government contracts. This document is employed when a party requires financial security for the performance of obligations by another party. The guarantee becomes payable only when specific conditions are met, unlike an unconditional guarantee which is payable on demand. Under Nigerian law, these guarantees must comply with the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria regulations. The document typically includes details of the underlying transaction, conditions for payment, claim procedures, and validity period, making it a vital tool for risk management in commercial relationships.
Suggested Sections

1. Parties: Identification of the Bank (Guarantor), the Applicant (Principal), and the Beneficiary

2. Background: Details of the underlying transaction or relationship between the Applicant and Beneficiary that necessitates the guarantee

3. Definitions: Definitions of key terms used throughout the guarantee

4. Guarantee Amount: Specification of the maximum amount guaranteed and currency

5. Conditions Precedent: Specific conditions that must be met before the guarantee becomes effective

6. Trigger Events: Clear description of the events or conditions that will trigger the bank's obligation to pay

7. Claim Procedure: Detailed process for making a claim under the guarantee, including required documentation

8. Bank's Obligations: Scope and nature of the bank's commitments under the guarantee

9. Validity Period: Duration of the guarantee, including start date and expiry date

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

11. Execution: Signature blocks and execution formalities

Optional Sections

1. Counter-Guarantee: Required when there is a counter-guarantee from another bank or financial institution

2. Currency Provisions: Required for guarantees involving foreign currency or international transactions

3. Assignment: Include when the guarantee needs to be transferable or assignable

4. Anti-Money Laundering Compliance: Required for high-value guarantees or where there are specific compliance requirements

5. Force Majeure: Optional clause detailing circumstances beyond control that may affect the guarantee

6. Stamp Duty Declaration: Required when specific stamp duty compliance needs to be documented

7. Multiple Beneficiary Provisions: Required when there are multiple beneficiaries under the guarantee

Suggested Schedules

1. Schedule 1 - Form of Demand: Template for making a claim under the guarantee

2. Schedule 2 - Supporting Documents: List and format of required supporting documents for claims

3. Schedule 3 - Underlying Contract Details: Summary or extract of the main contract being guaranteed

4. Appendix A - Bank's Standard Terms and Conditions: Standard terms and conditions applicable to the bank guarantee

5. Appendix B - Special Conditions: Any special conditions or requirements specific to this guarantee

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
Guarantee
Bank
Principal
Beneficiary
Underlying Contract
Guarantee Amount
Conditions Precedent
Trigger Event
Claim Notice
Demand
Supporting Documents
Business Day
Banking Day
Effective Date
Expiry Date
Validity Period
Force Majeure Event
Material Adverse Change
Guaranteed Obligations
Default Event
Regulatory Authority
Applicable Law
Counter-Guarantee
Maximum Liability
Payment Currency
Stamp Duty
Authorized Signatory
Notice
Security Interest
Compliant Presentation
Advance Payment
Performance Security
Working Day
CBN
BOFIA
Governing Law
Original Guarantee
Extension Period
Claim Period
Documentary Requirements
Clauses
Parties
Interpretation
Definitions
Guarantee Obligation
Conditions Precedent
Payment Terms
Currency Provisions
Claim Procedure
Documentary Requirements
Bank's Rights and Obligations
Principal's Covenants
Representations and Warranties
Validity Period
Extension Provisions
Release and Discharge
Assignment and Transfer
Force Majeure
Notices
Amendments
Severability
Indemnification
Regulatory Compliance
Anti-Money Laundering
Stamp Duty
Costs and Expenses
Confidentiality
Set-Off Rights
Multiple Beneficiaries
Counter-Guarantees
Default Events
Governing Law
Jurisdiction
Dispute Resolution
Entire Agreement
Execution
Relevant Industries

Banking & Financial Services

Construction & Infrastructure

International Trade

Oil & Gas

Manufacturing

Real Estate Development

Government & Public Sector

Telecommunications

Mining

Energy

Import/Export

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Commercial Operations

Banking Operations

Trade Finance

Project Finance

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Treasury Manager

Financial Controller

Legal Counsel

Contract Manager

Risk Manager

Banking Relationship Manager

Trade Finance Manager

Project Finance Manager

Compliance Officer

Commercial Director

Finance Director

General Counsel

Company Secretary

Banking Operations Manager

Industries
Banks and Other Financial Institutions Act (BOFIA) 2020: The primary legislation governing banking operations in Nigeria, including the issuance of guarantees and other financial instruments by banks
Central Bank of Nigeria Act 2007: Provides regulatory framework for banking operations and monetary policy, including requirements for financial instruments issued by banks
Nigerian Contract Law: Based on common law principles, governs the formation and enforcement of contracts, including bank guarantees
Evidence Act 2011: Governs the admissibility of evidence in Nigerian courts, including documentary evidence such as bank guarantees
Stamp Duties Act (as amended): Requires certain documents, including bank guarantees, to be properly stamped to be admissible in evidence and enforceable in Nigerian courts
Money Laundering (Prevention and Prohibition) Act 2022: Provides regulations for financial transactions and due diligence requirements that may affect the issuance of bank guarantees
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Relevant for bank guarantees involving foreign currency or international transactions
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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