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The Deed of Guarantee and Indemnity is a crucial security document widely used in Pakistani business and financial transactions. It serves as a risk mitigation tool where one party requires additional security for obligations owed by another. The document is particularly relevant in lending arrangements, property transactions, and commercial contracts where credit risk needs to be managed. Under Pakistani law, this deed creates two distinct obligations: a guarantee (contingent on the principal debtor's default) and an indemnity (a primary obligation independent of the underlying obligation). The document must comply with the Contract Act 1872, particularly sections 124-147 governing guarantees, and typically requires proper stamping and potentially registration depending on the nature and value of the guaranteed obligations. It is commonly used by banks, financial institutions, and businesses to secure various types of obligations, from loan repayments to performance obligations under commercial contracts.

1. Parties: Identifies and defines all parties to the deed - the Guarantor(s), the Beneficiary (creditor), and reference to the Principal Debtor

2. Background: Recitals explaining the context of the guarantee, including details of the primary obligation being guaranteed

3. Definitions and Interpretation: Defines key terms used throughout the deed and sets out interpretation principles

4. Guarantee: Core section detailing the guarantee obligations, including the scope and nature of the guarantee

5. Indemnity: Sets out the indemnity obligations of the guarantor

6. Nature of Guarantee and Indemnity: Specifies whether the guarantee is continuing, unconditional, irrevocable, and/or joint and several

7. Preservation of Rights: Provisions ensuring the guarantee remains valid despite various changes or circumstances

8. Payments: Details about payment obligations, including timing, method, and currency

9. Representations and Warranties: Guarantor's confirmations about their capacity and authority to enter into the deed

10. Costs and Expenses: Allocation of costs related to the preparation and enforcement of the guarantee

11. Notices: Process and requirements for giving notices under the deed

12. Governing Law and Jurisdiction: Confirms Pakistani law as governing law and specifies jurisdiction for disputes