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Conditional Bank Guarantee for Austria

Conditional Bank Guarantee Template for Austria

A Conditional Bank Guarantee under Austrian law is a formal undertaking by a bank to pay a specified sum to a beneficiary upon the occurrence of specific predetermined conditions. This document, governed by Austrian legislation including the Austrian Civil Code (ABGB) and Banking Act (BWG), provides financial security while requiring the beneficiary to demonstrate that the conditions for payment have been met. It differs from an unconditional guarantee by requiring documentary evidence of default or triggering events before payment can be claimed. The document includes detailed provisions for making claims, verification procedures, and specific conditions that must be satisfied for the guarantee to be called upon.

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What is a Conditional Bank Guarantee?

The Conditional Bank Guarantee is a crucial financial instrument in Austrian commercial transactions, particularly used in large-scale projects, international trade, and construction contracts. It serves as a risk mitigation tool where the guarantor bank commits to pay a specified amount to the beneficiary only upon the occurrence and proof of specific conditions, typically relating to the principal's performance or obligations. This document type is governed by Austrian law, particularly the ABGB and BWG, and may also incorporate international banking practices such as the ICC's URDG 758. The guarantee includes detailed provisions regarding the conditions for payment, claim procedures, expiry terms, and documentary requirements. It's particularly important in scenarios where parties seek a balanced approach between security and conditional payment obligations.

What sections should be included in a Conditional Bank Guarantee?

1. Parties: Identification of the Bank (Guarantor), the Beneficiary, and the Principal (Account Party)

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

3. Definitions: Key terms used throughout the guarantee, including 'Guaranteed Sum', 'Expiry Date', and 'Triggering Event'

4. Guarantee Amount and Currency: Specification of the maximum guaranteed amount and currency of payment

5. Conditions for Payment: Detailed conditions that must be met before the bank is obligated to pay under the guarantee

6. Form and Method of Demand: Requirements for making a valid demand under the guarantee, including necessary documentation

7. Payment Terms: Timeframe and process for payment once conditions are met

8. Expiry and Return: Validity period of the guarantee and conditions for return or expiry

9. Governing Law and Jurisdiction: Specification of Austrian law as governing law and jurisdiction for disputes

10. Notices: Communication requirements and contact details for all parties

11. Assignment and Transfer: Restrictions on transfer or assignment of rights under the guarantee

What sections are optional to include in a Conditional Bank Guarantee?

1. Reduction Clause: Used when the guarantee amount can be reduced over time or upon certain events

2. Extension Provisions: Include when the guarantee may need to be extended beyond its initial expiry date

3. Counter-Guarantee Provisions: Required when involving a foreign bank as counter-guarantor

4. Language Provisions: Needed for international guarantees to specify the prevailing language version

5. Force Majeure: Include when specific force majeure events need to be addressed

6. Electronic Presentation: Include when allowing for electronic submission of demands

7. URDG 758 Incorporation: Optional incorporation of ICC Uniform Rules for Demand Guarantees

What schedules should be included in a Conditional Bank Guarantee?

1. Schedule 1 - Form of Demand: Template for submitting a valid demand under the guarantee

2. Schedule 2 - Required Documents: List of documents required to be presented with a demand

3. Schedule 3 - Form of Reduction Notice: Template for notices reducing the guarantee amount (if applicable)

4. Appendix A - Underlying Contract Details: Key details of the underlying transaction being guaranteed

5. Appendix B - Authorized Signatories: List of persons authorized to make demands under the guarantee

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Austria

Publisher

Ƶ

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses






























Relevant Industries

Banking and Financial Services

Construction and Infrastructure

International Trade

Manufacturing

Energy and Utilities

Real Estate Development

Government and Public Sector

Telecommunications

Mining and Resources

Engineering and Construction

Relevant Teams

Legal

Finance

Treasury

Risk Management

Commercial Operations

Trade Finance

Project Management

Compliance

Credit

Business Development

Relevant Roles

Legal Counsel

Finance Director

Treasury Manager

Contract Manager

Risk Manager

Trade Finance Manager

Project Manager

Commercial Director

Chief Financial Officer

Banking Relationship Manager

Compliance Officer

Corporate Lawyer

Business Development Manager

Credit Risk Officer

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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