Construction Bank Guarantee Template for Singapore

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Key Requirements PROMPT example:

Construction Bank Guarantee

"Need a Construction Bank Guarantee for a 15-story commercial building project in Singapore, with a guarantee amount of SGD 5 million and validity period until March 2025, to be issued by DBS Bank in favor of Singapore Commercial Properties Ltd."

Document background
A Construction Bank Guarantee is commonly required in Singapore's construction industry to provide financial security for large-scale building projects. This document becomes necessary when a project owner requires security against potential contractor defaults or non-performance. The guarantee typically includes specific details about the construction project, guarantee amount, validity period, and claim conditions. Under Singapore law, these guarantees are typically provided on an 'on-demand' basis, meaning payment must be made upon presentation of compliant documents, regardless of disputes in the underlying construction contract.
Suggested Sections

1. Bank Details: Information about the issuing bank including name, registration number, and authorized signatories

2. Guarantee Amount: Specified sum of the guarantee in numbers and words, including currency

3. Principal Contract Reference: Details of the underlying construction contract including contract number, date, and parties

4. Beneficiary Details: Complete information about the party benefiting from the guarantee including name, registration number, and address

5. Validity Period: Specific start and end dates of the guarantee, including any automatic extension provisions

6. Demand Requirements: Detailed conditions and process for making claims under the guarantee

Optional Sections

1. Partial Drawings: Terms and conditions for making multiple partial claims against the guarantee, including minimum claim amounts and notice requirements

2. Assignment Provisions: Terms governing the transfer of guarantee rights to third parties, including notification requirements and restrictions

3. Counter-Guarantee: Terms relating to counter-guarantee arrangements between multiple banks, typically used in international transactions

Suggested Schedules

1. Form of Demand: Standard template for submitting claims under the guarantee, including required declarations and supporting documentation

2. Principal Contract Summary: Summary of key terms from the underlying construction contract relevant to the guarantee

3. Bank Authorization Documents: Documentation evidencing the bank's authority to issue the guarantee and specimen signatures of authorized signatories

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

Industries

Building and Construction Industry Security of Payment Act (SOPA): Primary legislation governing payment security in construction contracts and related guarantees in Singapore

Banking Act (Cap. 19): Core banking legislation in Singapore that regulates banking business and financial institutions issuing guarantees

Application of English Law Act: Legislation determining the application of English contract law principles in Singapore's legal system

Unfair Contract Terms Act (UCTA): Legislation controlling the use of unfair terms in contracts, including guarantees and bonds

MAS Guidelines: Regulatory guidelines issued by Monetary Authority of Singapore governing banking practices and financial instruments

BCA Guidelines: Building and Construction Authority guidelines relevant to construction contracts and related security instruments

ABS Guidelines: Association of Banks in Singapore guidelines on banking practices including issuance of guarantees

Singapore Case Law on Bank Guarantees: Relevant judicial decisions and precedents regarding bank guarantees and performance bonds in Singapore courts

URDG 758: Uniform Rules for Demand Guarantees by ICC, providing international standards for demand guarantees and counter-guarantees

ISP98: International Standby Practices providing rules for standby letters of credit and similar instruments

Fraud Exception Doctrine: Legal principle allowing courts to intervene in autonomous guarantees in cases of established fraud

Autonomy Principle: Legal doctrine establishing the independent nature of bank guarantees from the underlying construction contract

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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