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The Indemnity Bond For Bank Guarantee is a crucial financial security document used in Pakistani business transactions where a bank guarantee is required. This document becomes necessary when a bank issues a guarantee on behalf of its customer (the principal) to a third party (the beneficiary). The indemnity bond protects the bank by ensuring that the principal will reimburse any payments the bank makes under the guarantee. Common scenarios include construction projects, tender submissions, advance payment securities, and performance guarantees. The document must comply with Pakistani legislation, including the Contract Act 1872, Banking Companies Ordinance 1962, and relevant State Bank of Pakistan regulations. It may also need to adhere to Islamic banking principles depending on the banking relationship. The bond typically includes details of the guarantee, indemnity provisions, payment terms, and enforcement mechanisms.

1. Parties: Identification of the Indemnifier (Principal/Applicant), the Bank (Beneficiary of the indemnity), and details of their authorized representatives

2. Background: Context of the bank guarantee being issued, including reference to the underlying transaction or purpose

3. Definitions: Key terms used in the document including 'Bank Guarantee', 'Guaranteed Amount', 'Beneficiary', etc.

4. Bank Guarantee Details: Specific details of the bank guarantee including amount, validity period, and purpose

5. Indemnity Undertaking: Core indemnity provisions where the indemnifier undertakes to protect the bank against all losses

6. Scope of Indemnity: Detailed description of what losses, damages, and costs are covered under the indemnity

7. Payment Obligations: Terms regarding payment timing, method, and conditions

8. Representations and Warranties: Standard declarations about legal capacity, authority, and accuracy of information

9. Duration: Term of the indemnity bond and conditions for extension or termination

10. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and relevant court jurisdiction