The Payment and Performance Guarantee is a crucial security instrument in Austrian business transactions, particularly in large-scale projects and commercial contracts. It serves a dual purpose by securing both financial obligations and performance commitments of the principal debtor. This type of guarantee is commonly used in construction projects, infrastructure developments, and major supply contracts where the beneficiary requires comprehensive protection against both payment defaults and performance failures. The document is structured to comply with Austrian legal requirements, including the Austrian Civil Code (ABGB) and Commercial Code (UGB), while also potentially incorporating international standards such as ICC Uniform Rules. The guarantee can be either abstract (unconditional) or accessory, depending on the specific requirements of the transaction, and typically includes detailed provisions for claim procedures, validity periods, and release conditions.
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1. Parties: Identification of the Guarantor (usually a bank or financial institution), the Beneficiary, and the Principal Debtor
2. Background: Context of the underlying transaction and the reason for issuing the guarantee
3. Definitions: Key terms used throughout the guarantee, including 'Guaranteed Obligations', 'Trigger Events', and 'Maximum Guarantee Amount'
4. Guarantee: Core section detailing the scope and nature of the guarantee commitment, explicitly stating whether it's abstract (unconditional) or accessory
5. Payment Obligations: Specific terms regarding payment obligations, including maximum amount, currency, and payment conditions
6. Performance Obligations: Details of the performance aspects being guaranteed and conditions for claiming under performance failures
7. Claim Procedure: Process and requirements for making claims under the guarantee, including required documentation and timeframes
8. Duration and Expiry: Validity period of the guarantee, including start date, expiry conditions, and any extension provisions
9. Reduction and Release: Conditions under which the guarantee amount may be reduced and when the guarantor will be released from obligations
10. Governing Law and Jurisdiction: Confirmation of Austrian law as governing law and jurisdiction for disputes
1. Transfer and Assignment: Include when the guarantee may need to be transferable or when assignment rights need to be restricted
2. Counter-Indemnity: Include when the guarantor requires specific indemnification from the principal debtor
3. Multiple Guarantors: Include when there are multiple guarantors, defining their respective rights and obligations
4. Force Majeure: Include for international guarantees or when specific force majeure provisions are required
5. Language: Include when the guarantee might be issued in multiple languages, specifying which version prevails
6. Compliance with ICC Rules: Include when the guarantee needs to comply with ICC Uniform Rules for Demand Guarantees
7. Bank-Specific Requirements: Include when the guarantor bank has specific institutional requirements or conditions
1. Form of Demand: Template for making a valid demand under the guarantee
2. Underlying Contract Details: Summary or extract of the main contract being guaranteed
3. Performance Metrics: Specific performance criteria and measurement methods for performance-related claims
4. Authorized Signatories: List of persons authorized to make demands under the guarantee
5. Bank Details: Payment instructions and bank account details for claim settlements
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