Performance Bank Guarantee Model

At the time of procuring a complex / sensitive equipment, or contracting for significant works - services, the risk(s) posed to the company resulting from a supplier's / contractor's failure to perform their contractual obligations need(s) to be assessed in order to consider the potential impacts on the business.

If the result of this assessment is definitely a moderate to elevated likelihood of occurence and significant to major impact on the business, then protecting the company in case of supplier's / contractor's failure to perform becomes a sensitive activity.

In that context, and on top of any other mitigation measures driven by the Risk Management team, one of the contractual protections available to the company is the implementation of a Performance Bank Guarantee. We recommend any team intending to use this contractual instrument to ask for guidance from a senior contracts and procurement professional in order to synchronise the contract(s) and the guarantee(s) in order to ensure that the broadest possible spectrum of failure to perform is protected.

The model provided here is an on demand, irrevocable, primary bank guarantee in the form of a deed governed by the British Laws and Courts.