Performance Bond - Sample in English

A performance bond is a type of guarantee issued by a bank, known as the issuing bank, on behalf of a client, often referred to as the applicant. The purpose of a performance bond is to ensure that the applicant fulfills its contractual obligations. In the event that the applicant fails to perform or meet the terms of the contract, the beneficiary, who is typically the counterparty to the contract, can make a claim on the performance bond.

Here is a sample of a performance bond in English:

PERFORMANCE BOND

(Bank's Letterhead)

Date: [Insert Date]

To: [Insert Name and Address of the Beneficiary]

Dear Sir/Madam,

We refer to the contract dated [Insert Contract Date] between [Insert Applicant's Name] (hereinafter referred to as "the Applicant") and [Insert Beneficiary's Name] (hereinafter referred to as "the Beneficiary").

In consideration of the above contract, we, [Insert Bank's Name], with our principal office at [Insert Bank's Address], hereby issue this Performance Bond (hereinafter referred to as "the Bond") in favor of the Beneficiary.

The Bond is issued as security for the faithful performance and fulfillment by the Applicant of all its obligations under the contract.

This Bond is effective from [Insert Effective Date] and shall remain valid until [Insert Expiry Date]. The Bond amount is [Insert Bond Amount] and is payable on demand upon the first written claim made by the Beneficiary in accordance with the terms and conditions of the contract.

Any claim must be received by us in writing, accompanied by supporting documents evidencing the Applicant's failure to perform or meet the contractual obligations.

Upon receipt of a claim, we shall review the claim within [Insert Review Period] and notify the Beneficiary in writing of our decision to either honor the claim and make payment or dispute the claim, providing reasons for the dispute.

This Bond is subject to the laws and regulations of [Insert Governing Jurisdiction]. Any disputes arising from or in connection with this Bond shall be resolved by the courts in [Insert Jurisdiction for Dispute Resolution].

This Bond is non-transferable and shall not be assigned or pledged without the prior written consent of [Insert Bank's Name].

Yours faithfully,

[Insert Authorized Signatory's Name]

[Insert Authorized Signatory's Title]

[Insert Bank's Name]

Important Note:

The above sample performance bond is provided for informational purposes only. Please consult with your legal and financial advisors to obtain professional advice specific to your situation and jurisdiction before issuing or accepting any performance bonds.