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Homepage (/) ... Appendix 5, Annex E: Example Form of Advance Payment Guarantee

Appendix 5, Annex E: Example Form of Advance Payment Guarantee

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Author: Christopher R. Seppälä

Publication: The FIDIC Red Book Contract: An International Clause-by-Clause Commentary (/document/The FIDIC Red Book Contract: An
International Clause-by-Clause Commentary)

Organization: International Federation of Consulting Engineers

Bibliographic 'Appendix 5, Annex E: Example Form of Advance Payment Guarantee', in Christopher R. Seppälä, The FIDIC Red Book Contract:
Reference: An International Clause-by-Clause Commentary, (© Kluwer Law International; Kluwer Law International 2023), pp. 1379 - 1380

Guarantee No.: [insert guarantee reference number]

The Guarantor: [insert name and address of place of issue, unless indicated in the letterhead]

Name of Contract/Contract No.: [insert reference number or other information identifying the contract between the Applicant and the
Beneficiary on which the guarantee is based]

The Beneficiary (the “Employer”): [insert name and address of the Beneficiary]

We have been informed that [insert name and address of the Contractor] (hereinafter called the “Applicant”) is your Contractor under
such Contract and wishes to receive an advance payment, for which the Contract requires him/her to obtain a guarantee.

At the request of the Applicant, we [insert name of Guarantor] hereby irrevocably undertake to pay you, the Beneficiary/Employer,
any sum or sums not exceeding in total the amount of [insert in figures and words the maximum amount payable and the currency in
which it is payable] (the “Guaranteed Amount”) upon receipt by us of your demand in writing and your written statement that:

(a) the Applicant has failed to repay the advance payment in accordance with the Conditions of Contract, and

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(b) the amount of the advance payment which the Applicant has failed to repay.

This guarantee shall become effective upon receipt [of the first instalment] of the advance payment by the Applicant. The Guaranteed
Amount shall be reduced by the amounts of the advance payment repaid to you, as evidenced by interim payment certificates issued
under Sub-Clause 14.6 of the Conditions of Contract. Following receipt of a copy of each interim payment certificate, we shall promptly
notify you of the revised Guaranteed Amount accordingly.

Any demand for payment must contain your signature(s) which must be authenticated by your bankers or by a notary public. The
authenticated demand and statement must be received by us at the following office [insert address of office] on or before [insert the
date 70 days after the expected expiry of the Time for Completion] (the “Expiry Date”), when this guarantee shall expire.

The party liable for the payment of any charges: [insert the name of the party].

This guarantee shall be governed by the laws of [insert the law governing the guarantee], and shall be subject to the Uniform Rules
for Demand Guarantees (URDG) 2010 Revision, ICC Publication No. 758.

SIGNED by: (signature) SIGNED by(1): (signature)

(name) (name)

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Date:

(1) Whether one or more signatories for the bank are required will depend on the bank and/or applicable law.

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