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The Performance Standby Letter of Credit is a critical financial instrument in South African commercial practice, particularly utilized in situations where parties require secure performance guarantees for significant commercial obligations. This document type emerged from international banking practices and has been adapted to comply with South African banking regulations and legal requirements. It serves as an independent undertaking by a bank to pay upon documented default, providing beneficiaries with a reliable security instrument. The document typically details the specific performance obligations being guaranteed, drawing conditions, expiry terms, and documentary requirements. Under South African law, these instruments are commonly used in large-scale projects, international trade, and significant commercial contracts where performance assurance is crucial. The Performance Standby Letter of Credit's independence from the underlying contract makes it a preferred security instrument for beneficiaries seeking reliable performance protection.

1. Letter Head and Reference: Bank's letterhead, reference number, date, and type of credit (Performance Standby Letter of Credit)

2. Beneficiary Details: Full name and address of the party in whose favor the SBLC is issued

3. Applicant Details: Full name and address of the party requesting the SBLC

4. Credit Number: Unique identification number of the SBLC

5. Currency and Amount: Specified currency and maximum drawable amount in figures and words

6. Expiry Details: Expiry date and place of the SBLC

7. Performance Obligation: Clear description of the underlying performance obligation being guaranteed

8. Drawing Terms: Specific conditions and required documents for drawing under the SBLC

9. Presentation Location: Where and how documents must be presented for drawing

10. Governing Law and Jurisdiction: South African law and jurisdiction clause

11. Applicable Rules: Reference to ISP98 and/or UCP 600 as applicable rules