Introduction

In international trade and business transactions, a bank guarantee (also known as a bank letter of guarantee or simply a bank guarantee) plays a vital role. It serves as a written commitment from a bank ensuring that a specific obligation will be fulfilled by the borrower in due course. This article aims to guide readers on how to write a bank guarantee in English.

1. Heading

The bank guarantee should begin with a clear and concise heading stating its purpose. For example, "Bank Guarantee for [Purpose/Project/Contract]". This heading should be prominently placed at the top center or top left of the document to attract immediate attention.

2. Parties Involved

Next, clearly identify the parties involved in the bank guarantee. This includes the name and address of the beneficiary (the party who will receive the payment in case of default), the applicant (the party requesting the bank guarantee), and the issuing bank (the financial institution providing the guarantee).

3. Specification of Obligation

Specify the exact amount and currency of the bank guarantee, as well as the duration of its validity. Additionally, provide details regarding the underlying obligation, such as the project, contract, or agreement for which the guarantee is being issued.

4. Terms and Conditions

Clearly outline the terms and conditions of the bank guarantee. This includes information about any potential claims, the procedure to be followed in case of default, and any necessary documentation required for making a claim.

5. Governing Law and Jurisdiction

State the governing law and jurisdiction that will be used to interpret and enforce the bank guarantee. This is important for resolving any potential disputes that may arise during the term of the guarantee.

6. Execution

The bank guarantee should be signed by authorized representatives of both the issuing bank and the applicant. Their names, positions, and contact information should be clearly indicated below their signatures.

7. Annexure (if applicable)

If there are any additional documents or annexures attached to the bank guarantee, provide a clear reference to them in the main body of the guarantee. For example, "Please refer to Annexure A for further details."