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Bank Endorsement Guarantee Template for United Arab Emirates

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Key Requirements PROMPT example:

Bank Endorsement Guarantee

"I need a Bank Endorsement Guarantee for a construction project in Dubai, where ABC Bank will guarantee AED 5 million to the Dubai Municipality on behalf of our development company, valid from January 1, 2025, to December 31, 2025, with quarterly reduction provisions."

Document background
The Bank Endorsement Guarantee is a crucial financial instrument in the UAE business environment, particularly vital for securing commercial contracts and ensuring business confidence. This document is typically required when a party needs to provide security for their contractual obligations, such as in construction projects, tender submissions, or advance payment scenarios. The guarantee must comply with UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Central Bank regulations, which set out specific requirements for such guarantees. The document includes essential elements such as the guarantee amount, validity period, conditions for claims, and the scope of the bank's obligations. Bank Endorsement Guarantees are widely used in government contracts, private sector developments, and international trade transactions where UAE entities are involved, providing beneficiaries with a secure and legally enforceable financial commitment.
Suggested Sections

1. Parties: Identification of the Bank (Guarantor), the Principal (party requesting the guarantee), and the Beneficiary

2. Background: Context of the guarantee, including reference to the underlying transaction or agreement

3. Definitions: Key terms used throughout the guarantee document

4. Guarantee Amount: The maximum amount for which the bank is liable under the guarantee

5. Scope of Guarantee: Detailed description of what is being guaranteed and the nature of the bank's obligations

6. Duration and Validity: The effective date, expiry date, and any conditions affecting the guarantee's validity

7. Demand and Payment Conditions: Process and requirements for making a claim under the guarantee

8. Bank's Rights and Obligations: Outline of the bank's responsibilities and rights under the guarantee

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant jurisdiction for disputes

Optional Sections

1. Counter-Indemnity: Required when the Principal provides indemnity to the bank for any payments made under the guarantee

2. Assignment Provisions: Include when the guarantee needs to be transferable or assignable

3. Step-in Rights: Required when the bank has the right to step into the underlying contract in certain circumstances

4. Multiple Beneficiaries: Include when there is more than one beneficiary under the guarantee

5. Reduction Provisions: Include when the guarantee amount can be reduced over time or upon certain events

6. Currency Provisions: Required when payments might be made in multiple currencies or currency conversion is relevant

Suggested Schedules

1. Schedule 1 - Form of Demand: Template for making a valid demand under the guarantee

2. Schedule 2 - Underlying Contract Details: Key details of the contract or obligation being guaranteed

3. Schedule 3 - Fee Schedule: Details of bank fees and charges related to the guarantee

4. Schedule 4 - Communications: Contact details and authorized representatives of all parties

5. Appendix A - Required Documents: List of documents required to be submitted with any demand under the guarantee

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




























Clauses




























Relevant Industries

Banking & Financial Services

Construction & Infrastructure

International Trade

Real Estate Development

Manufacturing

Energy & Utilities

Government & Public Sector

Retail & Commercial

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Commercial

Risk Management

Compliance

Procurement

Project Management

Credit Control

Relevant Roles

Chief Financial Officer

Finance Manager

Treasury Manager

Legal Counsel

Commercial Director

Contract Manager

Risk Manager

Banking Relationship Manager

Credit Manager

Compliance Officer

Project Manager

Procurement Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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