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The Performance Guarantee Agreement is essential in commercial transactions where parties seek financial security for performance obligations. It is commonly used in construction projects, large-scale service contracts, and infrastructure developments in Denmark, providing beneficiaries with immediate access to funds upon a valid demand. The document must comply with Danish law requirements, including the Danish Contracts Act and Financial Business Act, while also considering EU regulations. The agreement typically specifies the guarantee amount, validity period, demand procedures, and payment terms. It serves as an independent obligation, separate from the underlying contract, and can be called upon following specified trigger events or performance failures.

1. Parties: Identification of the Guarantor, Principal (the party whose performance is being guaranteed), and Beneficiary

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Guarantee: Core section detailing the scope and nature of the guarantee obligation

5. Maximum Liability: Specification of the maximum amount guaranteed

6. Demand Procedure: Process and requirements for making a valid demand under the guarantee

7. Payment Terms: Timeline and conditions for payment upon valid demand

8. Duration and Expiry: Term of the guarantee and conditions for expiry

9. Independent Obligation: Confirmation that the guarantee is independent from the underlying contract

10. Representations and Warranties: Standard guarantor representations regarding capacity and authority

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

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of Danish law and jurisdiction

14. Execution: Signature blocks and execution formalities