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The Contract Performance Guarantee is a crucial security instrument in Nigerian commercial transactions, particularly used in high-value contracts and projects where performance assurance is essential. It provides financial security to the beneficiary (typically a project owner or employer) against the risk of non-performance or default by the principal (usually a contractor or service provider). The guarantee is typically issued by Nigerian banks or financial institutions regulated by the Central Bank of Nigeria, or sometimes by international banks with corresponding Nigerian bank confirmation. The document must comply with Nigerian banking regulations, contract law, and financial sector requirements, making it a robust instrument for securing contractual obligations in various commercial contexts.

1. Parties: Identifies the Guarantor (typically a bank/financial institution), the Beneficiary (party receiving the guarantee), and references the Principal (party whose performance is being guaranteed)

2. Background: Describes the underlying contract being guaranteed and explains why the guarantee is being provided

3. Definitions: Defines key terms used throughout the guarantee, including 'Guaranteed Obligations', 'Guarantee Amount', and 'Guarantee Period'

4. Guarantee: States the fundamental guarantee commitment and the maximum amount guaranteed

5. Scope of Guarantee: Details what specific obligations or performances are covered by the guarantee

6. Duration and Validity: Specifies the effective period of the guarantee and any conditions for extension

7. Demand Requirements: Outlines the process and conditions for making a claim under the guarantee

8. Payment Terms: Specifies how and when payment will be made following a valid demand

9. Reduction and Release: Conditions under which the guarantee amount may be reduced or the guarantee released

10. Governing Law and Jurisdiction: Specifies Nigerian law as governing law and establishes jurisdiction for disputes