Document background
The Financial Guarantee And Performance Guarantee is a critical document in Saudi Arabian business transactions, particularly in large-scale projects and commercial contracts. It serves as a risk mitigation tool by providing dual protection: securing financial obligations and ensuring performance standards. This document is essential when a party requires assurance of both payment and performance from another party, common in construction projects, government contracts, and major commercial transactions. The guarantee must comply with Islamic Shariah principles, Saudi banking regulations, and the requirements of the Saudi Central Bank (SAMA). It's typically issued by banks or financial institutions and can be called upon in cases of default in either financial payments or performance obligations. The document's structure accommodates the unique aspects of Saudi Arabian law while providing internationally recognized security mechanisms.
