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Bank Endorsement Guarantee
"I need a Bank Endorsement Guarantee for a construction project in Lagos, Nigeria, with First Bank Nigeria as guarantor for NGN 50 million, valid from January 1, 2025, to December 31, 2025, to secure advance payment from a government infrastructure project."
1. Parties: Identifies the three key parties: the bank (guarantor), the applicant (bank's client), and the beneficiary
2. Background: Explains the underlying transaction or relationship necessitating the guarantee
3. Definitions: Defines key terms used throughout the guarantee document
4. Guarantee Amount: Specifies the maximum amount of the guarantee and the currency
5. Scope of Guarantee: Details what is being guaranteed and the specific obligations covered
6. Duration and Validity: Specifies the effective date and expiry date of the guarantee
7. Conditions for Demand: Sets out the circumstances and process under which the beneficiary can make a demand under the guarantee
8. Payment Terms: Specifies how and when payment will be made upon a valid demand
9. Bank's Rights and Obligations: Details the bank's responsibilities and rights under the guarantee
10. Governing Law and Jurisdiction: Specifies Nigerian law as governing law and establishes jurisdiction for disputes
11. Notices: Provides details for how formal communications between parties should be made
12. Execution: Signature blocks and execution formalities
1. Counter-Indemnity: Optional section when the applicant provides specific indemnity to the bank, typically used in higher-value guarantees
2. Assignment Restrictions: Added when there's a need to restrict the transfer or assignment of rights under the guarantee
3. Multiple Beneficiaries: Included when there is more than one beneficiary to specify their rights and relationships
4. Currency Provisions: Required when the guarantee involves foreign currency or multiple currencies
5. Force Majeure: Added in cases where specific force majeure provisions are necessary
6. Step-In Rights: Included when the bank reserves the right to step into the underlying transaction
7. Reduction Clauses: Used when the guarantee amount may be reduced over time according to specific conditions
1. Schedule 1 - Form of Demand: Template for making a valid demand under the guarantee
2. Schedule 2 - Underlying Agreement Details: Details of the primary agreement or transaction being guaranteed
3. Schedule 3 - Fee Schedule: Details of bank fees and charges related to the guarantee
4. Appendix A - Required Documents: List of documents required for making a valid demand
5. Appendix B - Authorized Signatories: List of persons authorized to make demands or give notices under the guarantee
Authors
Banking & Financial Services
Construction & Infrastructure
International Trade
Oil & Gas
Manufacturing
Government & Public Sector
Real Estate
Telecommunications
Mining
Transportation & Logistics
Legal
Finance
Treasury
Risk Management
Compliance
Commercial
Procurement
Project Management
Trade Finance
Corporate Banking
Credit Risk
Chief Financial Officer
Finance Director
Treasury Manager
Bank Relationship Manager
Contract Manager
Legal Counsel
Risk Manager
Compliance Officer
Commercial Director
Project Manager
Procurement Manager
Credit Risk Officer
Trade Finance Manager
Corporate Banking Officer
Financial Controller
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