Advance Payment Bank Guarantee Sample

An advance payment guarantee secures the advance payment made by the beneficiary if the principal does not fulfill its contractual obligations.

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Bank guarantee means any signed undertaking, however named or described, providing for payment on presentation of a complying demand.

An advance payment bank guarantee is a type of bank guarantee.

Under an advance payment bank guarantee, the guarantor undertakes to repay an advanced payment that the principal has received in the event that the principal does not fulfill the terms of its contract.

An advance payment bank guarantee sample will be provided on this page.

The example you can find on this page is prepared as per ICC sample demand guarantee forms.

Advance Payment Bank Guarantee Sample

Beneficiary : Trusted Importhause of Heidelberg                                                          Date : 30.August.2014
Kurfuersten-Anlage 50-60
69000 Heidelberg
Germany

Advance Payment Bank Guarantee No. : 2014/001

We have been informed that Al-Aman Soap Factory Co. P.O.Box 2022 Jeddah 24500 K.S.A, (hereinafter called “the principal”), has entered into contract No. 1910201107 dated 19.August.2014 with you, for the supply of 230 Metric Ton/Metric Tons Laundry Soap.

Furthermore we understand that, according to the conditions of the contract, an advance payment in the sum of is to be made against an advance payment guarantee.

At the request of the principal, we First National Commercial Bank K.S.A. hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of 100.000,00USD (say One Hundred Thousand USD) upon receipt by us of your first demand in writing and your written statement stating:

that the principal is in breach of his obligations under the underlying contract, and
the respect in which the principal is in breach.

Your demand for payment must also be accompanies by the following documents:

Copy of commercial invoice

It is a condition for any claim and payment under this guarantee to be made that the advance payment referred to above must have been received the principal on his account number 111222333 at The National Commercial Bank (Head Office) Jeddah KSA.

This guarantee shall expire on 30.September.2014 at the latest.

Consequently any demand for payment under it must be received by us at this office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC publication No. 758.