A tender guarantee / bid bond is a bank guarantee by which a guarantor (the bank) undertakes to pay to a beneficiary certain amount of money if a tender participant (the guarantee principal) revokes its bid during the bidding process or refuses to conclude contract in accordance with conditions of the accepted tender.
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The document should be signed by the authorised signatory (or directors of a company) and witnessed to complete the formality.
The document titled 'Bid Bonds' is a letter from the bank of bank address to the beneficiary. It serves as a tender guarantee for the principal who has submitted an offer for the supply of a product in response to the beneficiary's invitation to tender. The purpose of this document is to provide assurance to the beneficiary that the principal will fulfill their obligations under the tender conditions.
The document begins with the sender and recipient information, including the bank's address and the beneficiary's name. It also includes the current date and a reference to the tender guarantee. The bank, as the sender of the letter, irrevocably undertakes to pay the beneficiary a specified amount upon receipt of a written demand and a statement indicating that the principal is in breach of their obligations under the tender conditions.
The letter specifies that the demand for payment must be accompanied by certain documents, although the nature of these documents is not mentioned in the document. The guarantee is valid until a specified expiry date, and any demand for payment must be received by the bank before that date.
The document concludes with a jurisdiction clause, indicating the applicable jurisdiction for any disputes related to the guarantee. It is signed off with 'Yours faithfully' and the name of the bank.
Overall, the 'Bid Bonds' document serves as a legally binding guarantee from the bank to the beneficiary, ensuring that the principal's obligations under the tender conditions will be fulfilled.
1. Provide information: Fill in the sender and recipient information, including the bank's address and the beneficiary's name.
2. Understand the purpose: Familiarize yourself with the purpose of the document, which is to provide a tender guarantee for the principal's offer.
3. Follow the format: Use the provided format for the document, including the specified headings and sections.
4. Specify the offer details: Include the relevant details of the principal's offer, such as the offer number and offer date.
5. Understand the guarantee terms: Read and understand the terms of the guarantee, including the specified amount and conditions for payment.
6. Prepare the demand for payment: Ensure that the demand for payment includes the required information, such as the breach of obligations by the principal and supporting documents.
7. Consider the expiry date: Be aware of the expiry date of the guarantee and ensure that any demand for payment is made before that date.
8. Review the jurisdiction clause: Take note of the jurisdiction clause and understand the applicable jurisdiction for any disputes.
9. Sign and send the document: Once the document is completed, sign it on behalf of the bank and send it to the beneficiary.
10. Keep a record: Maintain a copy of the document for record-keeping purposes and future reference.