Contra Bank Guarantee Template for Singapore

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Key Requirements PROMPT example:

Contra Bank Guarantee

"Need a Contra Bank Guarantee document for our Singapore subsidiary where HSBC Singapore will be the counter-guarantor for a USD 5 million guarantee issued by Bank of China, with validity until March 2025, covering a large infrastructure project in Malaysia."

Document background
The Contra Bank Guarantee is a crucial financial instrument used in international trade and banking transactions under Singapore law. It is typically employed when a local bank requires backing from an international bank to issue a guarantee, or when cross-border transactions necessitate multiple bank involvement. The document establishes the counter-guarantor's obligation to reimburse the issuing bank in case of a claim under the primary guarantee. This arrangement is particularly important in Singapore's position as a global financial hub, where international trade and banking transactions frequently require such security arrangements.
Suggested Sections

1. Parties: Identification of the guarantor bank, counter-guarantor bank, and beneficiary

2. Background: Context of the underlying transaction and purpose of the contra guarantee

3. Definitions: Key terms used throughout the document

4. Guarantee Amount: Specified amount of the guarantee and currency

5. Duration and Expiry: Validity period and conditions for expiry

6. Demand Requirements: Conditions and process for making claims

7. Counter-Indemnity: Terms of reimbursement between the banks

Optional Sections

1. Governing Law and Jurisdiction: Specific jurisdiction clauses if different from Singapore - use when parties are from different jurisdictions

2. Language: Governing language of the guarantee - use when dealing with international parties

3. Force Majeure: Provisions for unforeseen circumstances - use in high-risk transactions or jurisdictions

Suggested Schedules

1. Form of Demand: Template for making claims under the guarantee

2. Supporting Documents: List of required documents for claims

3. Fee Schedule: Details of banking charges and fees

4. Communication Procedures: Protocols for notices and communications between parties

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
Clauses
Industries

Banking Act (Chapter 19): Primary legislation governing banking institutions and their operations in Singapore, including the issuance of bank guarantees

Bills of Exchange Act (Chapter 23): Legislation governing negotiable instruments and related banking documents in Singapore

Application of English Law Act: Determines the extent to which English contract law principles apply in Singapore's legal system

Unfair Contract Terms Act: Regulates unfair terms in contracts and ensures reasonable standards of dealing in contractual relationships

Electronic Transactions Act: Governs electronic transactions and digital signatures, relevant for modern banking guarantees

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

ISP98: International Standby Practices that govern standby letters of credit and similar instruments

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore governing banking practices and guarantees

ABS Guidelines: Guidelines issued by the Association of Banks in Singapore providing industry standards and best practices

Singapore Case Law: Relevant Singapore court decisions establishing precedents on bank guarantees and their enforcement

Commonwealth Case Law: Relevant precedents from Commonwealth jurisdictions that may be persuasive in Singapore courts

Counter-indemnity Rules: Legal principles governing the counter-indemnities required in contra bank guarantees

Enforcement Regulations: Rules and procedures for enforcing bank guarantees in Singapore

Fraud Exception Rules: Legal principles regarding fraud and injunctions in bank guarantee cases

Cross-border Enforcement: Provisions and principles governing the enforcement of bank guarantees across jurisdictions

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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