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Payment Guarantee Agreement

Payment Guarantee Agreement Template for Germany

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Key Requirements PROMPT example:

Payment Guarantee Agreement

"I need a Payment Guarantee Agreement under German law where Deutsche Bank AG will guarantee payments up to €2.5 million by our subsidiary GmbH to a major supplier in Munich, with the guarantee expiring on March 31, 2025."

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Document background
The Payment Guarantee Agreement is a crucial financial security instrument in German business transactions, commonly used when one party seeks assurance of payment from another party's obligations. This document is particularly relevant in commercial contracts, construction projects, supply agreements, and international trade transactions where parties require payment security. The agreement must comply with German legal requirements, including the German Civil Code (BGB) provisions on guarantees and suretyships, and typically includes specific conditions for calling on the guarantee, documentation requirements, and payment procedures. A Payment Guarantee Agreement is especially important in scenarios where there's a need to mitigate payment risk or when required by regulatory or contractual obligations. The document's structure and content reflect German legal principles and commercial practices, making it distinct from guarantee agreements in other jurisdictions.
Suggested Sections

1. Parties: Identification of the Guarantor, Beneficiary, and Principal Debtor

2. Background: Context of the underlying obligation and purpose of the guarantee

3. Definitions: Definitions of key terms used throughout the agreement

4. Guarantee: Core provision establishing the guarantee obligation and its scope

5. Payment Conditions: Specific conditions under which the guarantee can be called and payment process

6. Demand Requirements: Formal requirements for making a valid demand under the guarantee

7. Representations and Warranties: Key statements of fact and assurances by the Guarantor

8. Duration and Expiry: Term of the guarantee and conditions for expiration

9. Reduction and Release: Circumstances under which the guarantee amount may be reduced or the Guarantor released

10. Notices: Communication requirements and contact details

11. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes

Optional Sections

1. Counter-Indemnity: Terms for reimbursement by the Principal Debtor to the Guarantor, used when the Principal Debtor is a party to the agreement

2. Assignment and Transfer: Provisions regarding the transferability of the guarantee, included when transfer rights are contemplated

3. Multiple Guarantors: Provisions for joint and several liability, used when there is more than one guarantor

4. Currency Provisions: Specific provisions for cross-border guarantees involving multiple currencies

5. Tax Gross-Up: Provisions for tax implications, included when cross-border elements exist

6. Electronic Execution: Provisions for digital signature and electronic communications, when relevant

7. Force Majeure: Provisions for extraordinary events affecting the guarantee, included for longer-term guarantees

Suggested Schedules

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

2. Underlying Agreement Details: Summary or extract of the principal obligation being guaranteed

3. Payment Instructions: Bank account and payment processing details

4. Required Documents: List of documents required to accompany a demand

5. Authorized Signatories: List of persons authorized to make demands or give notices

6. Guarantee Amount Reduction Schedule: Schedule of any planned reductions in the guarantee amount over time

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

Manufacturing

International Trade

Retail

Energy

Infrastructure

Telecommunications

Professional Services

Transport & Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Commercial

Compliance

Credit Control

Corporate Finance

Trade Finance

Contract Administration

Relevant Roles

Chief Financial Officer

Treasury Manager

Risk Manager

Legal Counsel

Contract Manager

Finance Director

Credit Controller

Commercial Director

Account Manager

Banking Relationship Manager

Compliance Officer

Corporate Finance Manager

Financial Controller

General Counsel

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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