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Bank Guarantee Agreement

Bank Guarantee Agreement Template for New Zealand

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Key Requirements PROMPT example:

Bank Guarantee Agreement

"I need a Bank Guarantee Agreement for a construction project where ANZ Bank will provide a $5 million guarantee to Wellington City Council, securing our company's performance in building a new community center, with the guarantee to remain valid until March 2025."

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Document background
The Bank Guarantee Agreement is a crucial financial instrument in New Zealand's commercial landscape, providing security and risk mitigation in various business transactions. It is commonly used in construction projects, tender submissions, lease agreements, and international trade transactions where one party seeks financial assurance from another. The document, governed by New Zealand law, establishes the bank's obligation to pay a specified sum to the beneficiary upon defined conditions, typically triggered by the principal debtor's default or non-performance. The agreement must comply with New Zealand banking regulations, financial services legislation, and contract law principles, making it a robust and widely accepted form of financial security in commercial dealings.
Suggested Sections

1. Parties: Identifies the bank (guarantor), the beneficiary, and the principal debtor

2. Background: Explains the context of the guarantee, including the underlying transaction or obligation being guaranteed

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Sets out the bank's primary obligations and the scope of the guarantee

5. Amount of Guarantee: Specifies the maximum guaranteed amount and currency

6. Duration and Expiry: Defines the effective period of the guarantee and conditions for expiry

7. Demand Requirements: Specifies the process and conditions for making a demand under the guarantee

8. Bank's Payment Obligations: Details the circumstances and timing of the bank's payment obligations

9. Reduction and Release: Explains how the guaranteed amount may be reduced and conditions for release of the guarantee

10. Governing Law and Jurisdiction: Specifies New Zealand law as governing law and jurisdiction for disputes

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

12. Execution: Formal signing section with necessary attestations

Optional Sections

1. Counter-Indemnity: Include when the principal debtor provides indemnity to the bank

2. Security Provisions: Include when specific assets or securities are pledged to support the guarantee

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

4. Multiple Beneficiaries: Include when there are multiple beneficiaries with specific arrangements

5. Step-In Rights: Include when the bank has rights to step into the underlying transaction

6. Foreign Law Requirements: Include when the guarantee needs to comply with foreign law requirements

7. Electronic Execution: Include when electronic execution is permitted

8. Force Majeure: Include when specific force majeure provisions are required for the guarantee

Suggested Schedules

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

2. Underlying Agreement Details: Summary or extract of the principal agreement being guaranteed

3. Fee Schedule: Details of bank fees and charges related to the guarantee

4. Authorized Signatories: List of persons authorized to make demands or give notices

5. Supporting Documents: List of required supporting documents for guarantee activation

6. Contact Details: Detailed contact information for all parties

7. Special Conditions: Any special or additional conditions applicable to the 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
Guaranteed Amount
Expiry Date
Demand
Guaranteed Obligations
Business Day
Effective Date
Bank
Beneficiary
Principal Debtor
Underlying Agreement
Event of Default
Guarantee Period
Demand Notice
Complying Demand
Authorized Representative
Banking Day
Claim
Counter-Indemnity
Security
Guaranteed Party
Maximum Liability
Payment Date
Material Adverse Effect
Potential Event of Default
Relevant Jurisdiction
Security Interest
Guarantee Fee
Enforcement Event
Release Date
Supporting Documents
Guarantee Facility
Valid Claim
Applicable Law
Force Majeure Event
Notice
Permitted Transfer
Related Party
Termination Event
Working Day
Relevant Industries

Banking and Financial Services

Construction and Infrastructure

International Trade

Real Estate Development

Manufacturing

Energy and Resources

Government and Public Sector

Telecommunications

Retail and Commerce

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Commercial Operations

Credit

Corporate Banking

Trade Finance

Business Development

Contract Administration

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Legal Counsel

Commercial Manager

Risk Manager

Compliance Officer

Banking Relationship Manager

Contract Administrator

Project Manager

Credit Manager

Corporate Banking Officer

Trade Finance Manager

Financial Controller

Business Development Manager

Industries
Contract and Commercial Law Act 2017: Provides the fundamental legal framework for contract formation, enforcement, and remedies in New Zealand, which is essential for the validity and enforceability of the bank guarantee agreement
Reserve Bank of New Zealand Act 2021: Governs banking institutions in New Zealand and provides regulatory framework for banking operations and financial stability
Financial Markets Conduct Act 2013: Regulates financial products and services, including requirements for financial instruments and securities like bank guarantees
Credit Contracts and Consumer Finance Act 2003: Relevant when the guarantee involves consumer credit or if the guarantor is considered a consumer, providing additional protections and disclosure requirements
Anti-Money Laundering and Countering Financing of Terrorism Act 2009: Ensures compliance with AML/CFT requirements in banking transactions and guarantee agreements
Personal Property Securities Act 1999: Relevant for registration and enforcement of security interests, which may be applicable depending on the nature of the guarantee
Banking (Prudential Supervision) Act 1989: Sets out prudential requirements for registered banks, including requirements around issuing guarantees and other financial instruments
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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