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Construction Bank Guarantee Template for Singapore

A Construction Bank Guarantee is a financial instrument issued by a bank under Singapore law, providing security to project owners against potential defaults or non-performance by contractors in construction projects. It serves as an independent undertaking by the bank to pay a specified sum upon demand, subject to the terms and conditions stated in the guarantee. The document is governed by Singapore's Building and Construction Industry Security of Payment Act and Banking Act, incorporating specific local regulatory requirements and banking practices.

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What is a Construction Bank Guarantee?

A Construction Bank Guarantee is commonly required in Singapore's construction industry to provide financial security for large-scale building projects. This document becomes necessary when a project owner requires security against potential contractor defaults or non-performance. The guarantee typically includes specific details about the construction project, guarantee amount, validity period, and claim conditions. Under Singapore law, these guarantees are typically provided on an 'on-demand' basis, meaning payment must be made upon presentation of compliant documents, regardless of disputes in the underlying construction contract.

What sections should be included in a Construction Bank Guarantee?

1. Bank Details: Information about the issuing bank including name, registration number, and authorized signatories

2. Guarantee Amount: Specified sum of the guarantee in numbers and words, including currency

3. Principal Contract Reference: Details of the underlying construction contract including contract number, date, and parties

4. Beneficiary Details: Complete information about the party benefiting from the guarantee including name, registration number, and address

5. Validity Period: Specific start and end dates of the guarantee, including any automatic extension provisions

6. Demand Requirements: Detailed conditions and process for making claims under the guarantee

What sections are optional to include in a Construction Bank Guarantee?

1. Partial Drawings: Terms and conditions for making multiple partial claims against the guarantee, including minimum claim amounts and notice requirements

2. Assignment Provisions: Terms governing the transfer of guarantee rights to third parties, including notification requirements and restrictions

3. Counter-Guarantee: Terms relating to counter-guarantee arrangements between multiple banks, typically used in international transactions

What schedules should be included in a Construction Bank Guarantee?

1. Form of Demand: Standard template for submitting claims under the guarantee, including required declarations and supporting documentation

2. Principal Contract Summary: Summary of key terms from the underlying construction contract relevant to the guarantee

3. Bank Authorization Documents: Documentation evidencing the bank's authority to issue the guarantee and specimen signatures of authorized signatories

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Singapore

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use

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