The Guarantee Cheque Against Advance Payment document is commonly used in Saudi Arabian commercial transactions where one party requires an advance payment to commence work or deliver goods/services, and the other party seeks security for this payment. This document type is particularly important in Saudi Arabia's business environment, where advance payments are common practice in many commercial sectors. The document ensures compliance with Saudi banking regulations, commercial laws, and Shariah principles while providing a legally enforceable security mechanism. It includes detailed provisions about the cheque's presentation, the conditions for its use, and the circumstances under which it can be cashed or must be returned. This type of agreement is especially relevant in high-value contracts where significant advance payments are involved, providing protection for both the party making the advance payment and the party receiving it.
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1. Parties: Identification of the party providing the guarantee cheque (Guarantor) and the party providing the advance payment (Beneficiary), including full legal names, addresses, and commercial registration details
2. Background: Context of the transaction, reference to the main agreement requiring advance payment, and the purpose of the guarantee cheque
3. Definitions: Key terms including 'Advance Payment', 'Guarantee Cheque', 'Maturity Date', and other relevant terminology
4. Cheque Details: Specific details of the guarantee cheque including cheque number, bank details, amount, and date
5. Advance Payment Terms: Details of the advance payment including amount, payment method, and timing
6. Conditions for Cheque Presentation: Circumstances under which the beneficiary may present the cheque for payment
7. Representations and Warranties: Guarantor's confirmations regarding authority, validity of cheque, and sufficient funds
8. Return of Guarantee Cheque: Conditions and timing for the return of the guarantee cheque upon completion of obligations
9. Governing Law and Jurisdiction: Specification of Saudi Arabian law as governing law and jurisdiction for disputes
1. Islamic Finance Compliance: Additional provisions ensuring compliance with Shariah principles, required when either party requires explicit Shariah compliance
2. Multiple Cheques Arrangement: Required when the guarantee is provided through multiple cheques rather than a single cheque
3. Currency Provisions: Required when the advance payment and guarantee cheque are in different currencies
4. Bank Verification: Optional section for cases where bank verification of the cheque is required prior to advance payment
5. Force Majeure: Optional provisions for extraordinary circumstances affecting the arrangement
1. Schedule 1 - Cheque Details: Copy of the guarantee cheque and detailed banking information
2. Schedule 2 - Advance Payment Details: Breakdown of advance payment amount and payment schedule if applicable
3. Schedule 3 - Related Agreements: List and details of related agreements referenced in the main document
4. Appendix A - Required Notices: Format and details for any notices required under the agreement
5. Appendix B - Bank Contact Details: Contact information for relevant bank branches and officers
Relevant legal definitions
Clauses
Relevant Industries
Construction
Manufacturing
Engineering
Real Estate Development
Infrastructure
Oil & Gas
Technology Services
Industrial Equipment
Defense Contracting
Project Development
Trade & Commerce
Telecommunications
Relevant Teams
Legal
Finance
Treasury
Commercial
Contracts
Procurement
Risk Management
Credit Control
Operations
Project Management
Relevant Roles
Chief Financial Officer
Finance Director
Treasury Manager
Commercial Director
Contracts Manager
Legal Counsel
Company Secretary
Credit Controller
Accounts Manager
Project Manager
Procurement Manager
Risk Manager
Financial Controller
Business Development Manager
Operations Director
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