Guarantees

A guarantee is an undertaking by a bank to pay a certain amount of money to the beneficiary of the guarantee in the event that the customer of the bank for whom the bank has given the guarantee fails to perform, or performs improperly, its obligations to the beneficiary of the guarantee.

Tender guarantee

A tender guarantee protects the entity that launched the tender (the beneficiary of the guarantee) against the risk of non-performance by the tenderer (customer).

A tender guarantee grants a monetary compensation to the beneficiary of the guarantee in the event that the tenderer withdraws its tender before the deadline or, after winning, the tenderer refuses to sign the contract, or fails to provide a performance guarantee, if so provided in the tender guarantee.

Contract performance guarantee

A contract performance guarantee reinforces obligations of the seller/contractor (customer) to a third party (the beneficiary of the guarantee) under the contract. This guarantee protects the interests of the buyer/customer (the beneficiary of the guarantee) and ensures that the seller/contractor (the customer) delivers the goods or performs the services on the terms and conditions set out in the contract.

The performance guarantee grants a monetary compensation to the buyer/customer if the (seller/contractor (customer)) fails to fulfil its obligations under the contract.

Advance payment guarantee

The advance payment guarantee ensures that the money paid in advance is refunded to the beneficiary of the guarantee in the event that the customer fails to deliver the goods or fulfil other contractual obligations.

Payment guarantee

A payment guarantee ensures that the beneficiary of the guarantee receives payment for the goods, works or services rendered. In addition to the claim, the beneficiary of the guarantee usually has to provide additional documentation (e.g. commercial invoice, bill of lading) proving that the beneficiary of the guarantee has fulfilled its contractual obligations and that the customer has not paid on time.

Beneficiary of the guarantee has an obligation to pay a certain amount of money in the event that the applicant fails to meet its obligations. The guarantee is irrevocable (unless otherwise specified in the text of the guarantee) and the applicant can not revoke or modify the terms of the guarantee without the consent of the beneficiary of the guarantee. The guarantee granted can serve as an instrument to enforce long-term contractual obligations.

The real or personal property proposed to be pledged must be appraised by independent property valuers. In this case, a line of credit is granted to the customer to provide guarantees