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A Performance Bank Guarantee is essential in commercial contracts where one party requires security for the other's performance obligations. Used extensively in construction, infrastructure, and other major projects in Ireland, it provides financial assurance to the Beneficiary that they can recover losses if the Principal fails to perform. The guarantee typically covers a percentage (usually 5-10%) of the underlying contract value and remains valid until the completion of the Principal's obligations. The document must comply with Irish banking regulations, contract law, and international standards like URDG 758. It's particularly important in public procurement and large-scale private projects where performance risk management is crucial.

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

2. Background: Context of the underlying contract and reason for the guarantee

3. Definitions: Key terms used throughout the guarantee including 'Guaranteed Obligations', 'Maximum Liability Amount', 'Expiry Date'

4. Guarantee and Indemnity: Core guarantee provisions, including the bank's undertaking to pay

5. Demand Requirements: Format and content requirements for making a valid demand under the guarantee

6. Payment Terms: Timing and method of payment upon receipt of valid demand

7. Reduction and Release: Circumstances under which the guarantee amount may be reduced and when the guarantee will be released

8. Expiry: Terms regarding the expiry of the guarantee and any applicable extension mechanisms

9. Assignment: Provisions regarding transfer or assignment of rights under the guarantee

10. Governing Law and Jurisdiction: Specification of Irish law as governing law and jurisdiction for disputes