Indemnity Bond Agreement Template for New Zealand

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Key Requirements PROMPT example:

Indemnity Bond Agreement

"I need an Indemnity Bond Agreement for a construction project in Auckland, with a bond amount of NZD 5 million to secure contractor performance, effective from March 1, 2025, for a 24-month duration."

Document background
The Indemnity Bond Agreement serves as a critical risk management tool in New Zealand's commercial landscape, providing financial security and protection in various business contexts. This document is typically used when one party needs to guarantee protection against potential losses or liabilities faced by another party, such as in construction projects, commercial developments, or major business transactions. The agreement, governed by New Zealand law, outlines the specific circumstances under which the indemnity can be claimed, the process for making claims, and the maximum liability amount. It incorporates key requirements from relevant New Zealand legislation, including the Contract and Commercial Law Act 2017 and the Financial Markets Conduct Act 2013. The document is particularly valuable in situations requiring robust financial security arrangements, such as large-scale projects, government contracts, or complex commercial transactions where significant risks need to be managed and allocated effectively.
Suggested Sections

1. Parties: Identifies and defines all parties to the agreement - the Indemnitor (party providing the indemnity), the Indemnitee (party receiving the protection), and any other relevant parties

2. Background: Sets out the context and purpose of the indemnity bond, including the underlying transaction or obligation being secured

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Bond Amount: Specifies the maximum amount of the indemnity bond and any conditions affecting this amount

5. Scope of Indemnity: Details the specific risks, losses, or circumstances covered by the indemnity bond

6. Term and Duration: Specifies the commencement date and duration of the bond, including any renewal provisions

7. Obligations of the Indemnitor: Sets out the specific duties and responsibilities of the party providing the indemnity

8. Conditions for Claims: Establishes the circumstances and process for making claims under the bond

9. Payment Terms: Details the timing and method of payments for valid claims

10. Termination: Specifies circumstances under which the bond may be terminated and the consequences

11. Governing Law and Jurisdiction: Confirms New Zealand law applies and specifies jurisdiction for disputes

12. Execution: Formal signing section including witness requirements

Optional Sections

1. Security Provisions: Required when specific assets or securities are pledged to support the indemnity obligation

2. Insurance Requirements: Included when the indemnitor must maintain specific insurance coverage

3. Assignment and Transfer: Needed when the agreement allows for transfer of rights or obligations

4. Force Majeure: Included when certain events should excuse performance under the bond

5. Confidentiality: Required when sensitive information is involved in the underlying transaction

6. Multiple Indemnitors: Included when more than one party provides the indemnity, establishing joint and several liability

7. Dispute Resolution: Optional detailed provisions for alternative dispute resolution procedures

Suggested Schedules

1. Schedule 1 - Bond Details: Detailed specifications of the bond amount, payment terms, and any calculation methods

2. Schedule 2 - Secured Obligations: Comprehensive list of obligations covered by the indemnity bond

3. Schedule 3 - Claim Procedures: Detailed procedures and requirements for making and processing claims

4. Schedule 4 - Security Details: Description of any security or collateral provided to support the bond

5. Appendix A - Forms: Standard forms for claims, notices, or other required communications

6. Appendix B - Insurance Certificates: Copies of required insurance certificates or policies

7. Appendix C - Corporate Authorizations: Copies of relevant corporate authorizations and resolutions

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

Relevant legal definitions
Relevant Industries

Construction

Infrastructure

Financial Services

Real Estate Development

Mining

Engineering

Manufacturing

Government Contracting

Insurance

Energy

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Commercial

Procurement

Project Management

Operations

Corporate Governance

Relevant Roles

Chief Financial Officer

Risk Manager

Legal Counsel

Contract Manager

Project Director

Commercial Director

Treasury Manager

Company Secretary

Compliance Officer

Finance Director

Insurance Manager

Bond Administrator

Construction Manager

Procurement Manager

Industries
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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