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Payment Guarantee Agreement

Payment Guarantee Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Payment Guarantee Agreement

"I need a Payment Guarantee Agreement under UAE law for a bank guarantee worth AED 10 million, where Emirates NBD will act as guarantor for our construction company's payment obligations to a supplier, with the guarantee period running until March 2025."

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Document background
The Payment Guarantee Agreement is a fundamental instrument in UAE commercial and financial transactions, used when one party seeks assurance of payment from another party through a third-party guarantee. This document is particularly relevant in scenarios involving significant financial commitments, international trade, construction projects, or large commercial transactions where payment security is crucial. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and relevant banking regulations, particularly Articles 1057-1093 governing guarantees. It outlines the scope of the guarantee, conditions for enforcement, demand procedures, and remedies available to the beneficiary. The document is commonly used in conjunction with other commercial agreements and can be structured to accommodate both conventional and Islamic banking principles under UAE law.
Suggested Sections

1. Parties: Identification of the Guarantor, Principal Debtor, and Beneficiary with full legal names and addresses

2. Background: Context of the guarantee, including reference to the underlying obligation or principal agreement

3. Definitions: Key terms used throughout the agreement, including 'Guaranteed Obligations', 'Guarantee Period', and 'Payment Notice'

4. Guarantee: Core guarantee provisions, amount, and scope of the guaranteed obligations

5. Payment Obligations: Specific terms of when and how payments must be made, including payment mechanics and currency

6. Demand Requirements: Process and formalities for making a valid demand under the guarantee

7. Duration and Release: Term of the guarantee and conditions for release or expiry

8. Representations and Warranties: Standard declarations by the Guarantor regarding capacity and authority

9. No Discharge or Waiver: Provisions maintaining the guarantee despite variations to underlying obligations

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

11. Notices: Communication procedures and contact details for formal notices

12. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction of UAE courts

Optional Sections

1. Multiple Guarantors: Additional provisions for joint and several liability when there is more than one guarantor

2. Counter-Indemnity: Terms for reimbursement of the guarantor by the principal debtor, if applicable

3. Security: Additional security arrangements supporting the guarantee

4. Tax Gross-Up: Provisions for tax implications and gross-up obligations, particularly relevant for cross-border guarantees

5. Currency Provisions: Detailed provisions for cross-border guarantees involving multiple currencies

6. Assignment and Transfer: Terms governing the ability to transfer or assign rights under the guarantee

7. Force Majeure: Provisions dealing with extraordinary events affecting the guarantee obligations

8. Compliance with Shariah: Additional provisions ensuring compliance with Islamic banking principles if required

Suggested Schedules

1. Form of Demand: Template for making a valid demand under the guarantee

2. Payment Details: Bank account and payment processing information

3. Underlying Agreement: Copy or key terms of the principal agreement being guaranteed

4. Security Documents: Details of any additional security or collateral provided

5. Corporate Authorizations: Copies of relevant corporate approvals and authorizations

6. Specimen Signatures: Authorized signatures for making and accepting demands under the guarantee

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions




































Clauses



































Relevant Industries

Banking & Financial Services

Construction & Real Estate

International Trade

Manufacturing

Retail

Energy & Utilities

Telecommunications

Infrastructure

Healthcare

Hospitality

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Commercial Operations

Credit Control

Corporate Secretariat

Trade Finance

Project Finance

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Treasury Manager

Commercial Director

Contracts Manager

Credit Manager

Company Secretary

Compliance Officer

Banking Relationship Manager

Project Finance Manager

Trade Finance Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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