Unlimited Bank Guarantee Template for Nigeria

The Unlimited Bank Guarantee is a crucial financial instrument used in high-value commercial transactions under Nigerian law where the exact extent of potential liability cannot be predetermined or where maximum security is required. This document is particularly relevant in major infrastructure projects, significant commercial contracts, and government tenders where the beneficiary requires comprehensive financial security. The guarantee provides an unconditional commitment from a bank to pay any sum demanded (without monetary limit) upon a valid demand, subject to the terms specified in the guarantee. The document must comply with Nigerian banking regulations, particularly the BOFIA 2020 and Central Bank of Nigeria directives. It includes detailed provisions for demand procedures, payment terms, and enforcement mechanisms, while ensuring compliance with local banking practices and regulatory requirements.

1. Parties: Identification of the Bank (Guarantor), the Principal (party whose obligations are being guaranteed), and the Beneficiary

2. Background: Context of the guarantee, including reference to the underlying transaction or obligation being guaranteed

3. Definitions: Key terms used throughout the guarantee, including 'Guaranteed Obligations', 'Demand', 'Business Day', etc.

4. Guarantee and Indemnity: Core section stating the bank's unlimited guarantee commitment and indemnification obligations

5. Demand Requirements: Procedure and format for making demands under the guarantee

6. Payment Terms: Timing and method of payment upon receipt of valid demand

7. Duration and Validity: Term of the guarantee and conditions for extension or termination

8. Bank's Rights and Obligations: Detailed outline of the bank's rights, including right of recourse against the Principal

9. Representations and Warranties: Standard banking and regulatory representations required under Nigerian law

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