The Performance Bank Guarantee is a crucial financial instrument in Danish commercial transactions, particularly in construction, infrastructure, and large-scale service contracts. It serves as a risk mitigation tool where the bank guarantees the performance obligations of a contractor or supplier. The document is structured according to Danish banking regulations and contract law principles, typically covering 5-10% of the contract value. Performance Bank Guarantees are commonly required in public tenders and major private contracts in Denmark, providing beneficiaries with secure and readily accessible financial compensation in case of contractor default. The guarantee can be either conditional or unconditional (on-demand), with specific requirements for calling on the guarantee outlined in accordance with Danish banking practices and legal requirements.
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1. Bank Details and Reference: Full details of the issuing bank, guarantee reference number, and date
2. Beneficiary Details: Complete identification of the beneficiary including name, registration number, and address
3. Principal Details: Complete identification of the principal (the party whose performance is being guaranteed)
4. Underlying Contract Reference: Clear identification of the contract or obligation being guaranteed, including date and reference numbers
5. Guarantee Amount: The specific amount being guaranteed, currency, and any automatic reduction mechanisms
6. Scope of Guarantee: Clear description of what is being guaranteed and the conditions under which the guarantee can be called
7. Duration and Validity: Effective date, expiry date, and any automatic extension provisions
8. Demand Requirements: Specific requirements and format for making a valid demand under the guarantee
9. Payment Terms: Timeline for payment upon valid demand and payment method
10. Governing Law and Jurisdiction: Explicit statement of Danish law as governing law and jurisdiction for disputes
1. Language Provision: Required when the guarantee might be used internationally, specifying that English version prevails
2. Conditional Performance Terms: Used when the guarantee is conditional rather than on-demand, specifying the conditions that must be met
3. Assignment Clause: Required when the guarantee needs to be transferable to another beneficiary
4. Reduction Schedule: Used when the guarantee amount reduces over time according to a preset schedule
5. Multiple Beneficiaries: Required when there is more than one beneficiary, specifying their rights and relationships
6. Force Majeure: Optional clause specifying circumstances under which the bank's obligations might be affected by events beyond its control
7. URDG 758 Application: Required when the guarantee is subject to ICC Uniform Rules for Demand Guarantees
1. Form of Demand: Template for making a valid demand under the guarantee
2. Underlying Contract Extract: Relevant excerpts from the underlying contract that specify the performance requirements being guaranteed
3. Reduction Schedule Table: If applicable, detailed table showing the schedule of guarantee amount reductions
4. Authorized Signatories: List of persons authorized to make demands under the guarantee with specimen signatures
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