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Performance Guarantee Agreement

Performance Guarantee Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Performance Guarantee Agreement

"I need a Performance Guarantee Agreement under Hong Kong law where ABC Holdings Limited will guarantee the construction obligations of its subsidiary ABC Construction Limited to XYZ Development Company, with a maximum liability cap of HKD 50 million and an expiry date of 30 June 2025."

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Document background
A Performance Guarantee Agreement is a crucial legal instrument in Hong Kong's commercial landscape, commonly used to provide security for contractual obligations in various business contexts. This document is essential when one party requires assurance about another party's performance or financial obligations, particularly in large commercial transactions, construction projects, or financial arrangements. The agreement, governed by Hong Kong law, details the guarantor's obligations, enforcement mechanisms, and the scope of the guarantee. It's particularly valuable in situations where the beneficiary needs additional security beyond the principal debtor's covenant, such as in project financing, construction contracts, or large-scale commercial transactions. The Performance Guarantee Agreement includes specific provisions required under Hong Kong law, ensuring enforceability and compliance with local legal requirements.
Suggested Sections

1. Parties: Identifies and defines the Guarantor, the Beneficiary, and the Principal Debtor

2. Background: Sets out the context of the underlying obligation and the purpose of the guarantee

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and indemnity provisions

5. Scope of Guarantee: Defines the extent and limitations of the guaranteed obligations

6. Duration and Validity: Specifies the term of the guarantee and conditions for its validity

7. Demands and Payments: Procedures for making demands under the guarantee and payment obligations

8. Continuing Security: Establishes the guarantee as a continuing security until all obligations are discharged

9. Representations and Warranties: Key statements and assurances given by the Guarantor

10. Preservation of Rights: Provisions maintaining the Beneficiary's rights in various circumstances

11. Costs and Expenses: Allocation of costs related to the guarantee and its enforcement

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirms Hong Kong law as governing law and jurisdiction for disputes

Optional Sections

1. Counter-Indemnity: Include when the Guarantor requires indemnification from the Principal Debtor

2. Security: Include when additional security is provided to support the guarantee

3. Assignment and Transfer: Include when rights under the guarantee may need to be assigned or transferred

4. Multiple Guarantors: Include when there is more than one guarantor to specify joint and several liability

5. Limit on Liability: Include when the guarantee amount is capped or limited in specific ways

6. Set-off Rights: Include when parties want to establish specific set-off arrangements

7. Currency Provisions: Include for cross-border transactions involving multiple currencies

Suggested Schedules

1. Schedule 1 - Guaranteed Obligations: Detailed description of the obligations being guaranteed

2. Schedule 2 - Form of Demand: Template for making formal demands under the guarantee

3. Schedule 3 - Conditions Precedent: List of conditions that must be satisfied before the guarantee becomes effective

4. Schedule 4 - Specified Security (if any): Details of any security provided in support of the guarantee

5. Schedule 5 - Payment Instructions: Banking and payment details for guarantee payments

6. Appendix A - Copy of Underlying Agreement: Reference copy of the agreement being guaranteed

Authors

Alex Denne

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

alex.den.21@genieai.co
Relevant legal definitions







































Clauses





























Relevant Industries

Banking and Finance

Construction and Infrastructure

Real Estate Development

Manufacturing

International Trade

Energy and Resources

Telecommunications

Government and Public Sector

Commercial Property

Industrial Development

Relevant Teams

Legal

Finance

Commercial

Risk Management

Treasury

Compliance

Operations

Contract Administration

Project Management

Corporate Secretarial

Relevant Roles

Chief Financial Officer

Legal Counsel

Contract Manager

Project Director

Commercial Director

Risk Manager

Treasury Manager

Financial Controller

Company Secretary

Compliance Officer

Business Development Director

Operations Director

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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