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Drawdown Bank Guarantee

Drawdown Bank Guarantee Template for Saudi Arabia

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Key Requirements PROMPT example:

Drawdown Bank Guarantee

"I need a Drawdown Bank Guarantee template for a construction project in Riyadh, with a guarantee amount of 5 million SAR, valid until March 2025, that includes provisions for electronic submission of demands and multiple authorized signatories."

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Document background
A Drawdown Bank Guarantee is a crucial financial instrument in Saudi Arabian commercial transactions where a bank provides a guarantee of payment to a beneficiary on behalf of a principal. This document is specifically designed for use in situations requiring a secure, Sharia-compliant financial guarantee with a clearly defined drawdown mechanism. It is commonly used in large commercial transactions, construction projects, and international trade dealings where the beneficiary requires security for performance or payment obligations. The guarantee must comply with Saudi Arabian Monetary Authority (SAMA) regulations and Sharia principles, making it suitable for use within the Saudi Arabian jurisdiction. The document includes comprehensive provisions for drawdown procedures, validity periods, and compliance requirements, ensuring it meets both regulatory standards and commercial needs.
Suggested Sections

1. Parties: Identification of the Bank (Guarantor), the Beneficiary, and the Principal (party requesting the guarantee)

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

3. Definitions: Key terms used throughout the guarantee, including 'Guaranteed Amount', 'Expiry Date', and 'Drawdown Notice'

4. Guarantee: Core guarantee provisions, maximum amount, and validity period

5. Drawdown Mechanism: Detailed procedures for making a demand under the guarantee

6. Bank's Undertaking: Specific commitments and obligations of the bank

7. Compliance Statement: Declaration of Sharia compliance and regulatory conformity

8. Payment Terms: Conditions and timing of payment upon valid demand

9. Expiry and Release: Terms regarding expiration of the guarantee and release of obligations

10. Governing Law and Jurisdiction: Specification of Saudi law application and jurisdictional matters

Optional Sections

1. Counter-Indemnity: Required when the principal provides indemnity to the bank; typically in a separate document

2. Assignment Provisions: Include when the guarantee needs to be transferable

3. Multiple Beneficiaries: Required when there is more than one beneficiary

4. Currency Provisions: Include for guarantees involving foreign currency

5. Force Majeure: Optional clause for extraordinary circumstances affecting guarantee performance

6. Electronic Presentation: Include when electronic submission of demands is permitted

Suggested Schedules

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

2. Specimen Signatures: Authorized signatures for the beneficiary and/or principal

3. Supporting Documents: List and samples of required supporting documentation for demands

4. Fee Schedule: Details of bank charges and fees (if applicable)

5. Contact Details: Communication details for all parties for notices and demands

Authors

Alex Denne

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

alex.den.21@genieai.co
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Relevant Industries

Banking & Financial Services

Construction

Infrastructure

Real Estate

Energy

International Trade

Manufacturing

Government & Public Sector

Telecommunications

Mining & Resources

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Commercial

Banking Operations

Credit

Corporate Finance

Project Finance

Relevant Roles

Legal Counsel

Finance Director

Treasury Manager

Compliance Officer

Bank Relationship Manager

Contract Manager

Chief Financial Officer

Risk Manager

Corporate Finance Manager

Project Finance Manager

Legal Director

Commercial Director

Banking Operations Manager

Credit Risk Officer

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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