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Deed of Guarantee by a Bank on behalf of a Company for the Performance of a Contract

Document Cited in Related
Vincent
Updated atMarch 2010

THIS DEED OF GUARANTEE made this........... day of............ 1999 between the Bank of................. (hereinafter called the bank) of the one part and the Governor of .................... (hereinafter called the purchaser) of the other part;

Whereas ......................... a company registered under the Companies Act 1956 (hereinafter called the contractor) have by a Deed of Agreement made on the.... agreed with the purchaser to supply those plants, machinery and equipment in accordance with the terms, specifications and conditions therein contained;

And whereas in accordance with the terms and conditions of the aforesaid agreement the purchaser has to make to the contractor an advance payment of....... Rs........... (Rupees............. only) being equivalent to.........% of the total F.O.B. Value of the contract price, and such payment is to be secured by a Bank guarantee;

And whereas the bank has at the request of the contractor agreed to guarantee the refund of the said advance in case the plants, machinery and equipment of the value...... aforesaid are not delivered to the State Government in accordance with the terms and conditions of the said agreement, and the Governor has agreed to make the said advance on such security:

Now this deed witnesses as follows:

  1. In consideration of the purchaser having agreed to advance a sum of.......... to the contractor, through the bank, the bank doth hereby guarantee that if the contractor shall fail to supply to the purchaser the plants machinery and equipment of the value of.............. in accordance with the specifications and conditions contained in the Deed of Agreement dated the.......... and/or any amendments or modifications in the aforesaid agreement made between the purchaser and the contractor................., the bank shall repay to the Governor such amount or amounts as the bank may be called upon to pay subject to the maximum aggregate of............

    Provided first that the liability of the bank under this deed shall not at any time exceed the said advance of................

    And provided secondly that the guarantee hereunder furnished shall be released and stand discharged as soon as the contractor has supplied to...

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