Performance Guarantee Sample

A performance guarantee (also called a performance bond) protects the beneficiary against the failure of the principal to meet its contractual obligations.


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

Performance guarantee issued by a bank and protects the beneficiary against the failure of the principal to meet its contractual obligations in the underlying contract.

Please keep in mind that a Tender Guarantee is issued before the tender contract is concluded.

On the other hand a Performance guarantee is issued by the winner of the tender after the tender contract is signed.

On this page you can find an example of a performance guarantee, which is prepared as per ICC sample demand guarantee forms.

Performance Guarantee Sample

Beneficiary: Bihar Urban Infrastructure Development Corporation Ltd.                       Date:30.August.2014
#303, 3rd Floor, Maurya Tower,
Maurya Lok Complex,
Budh Marg, Patna -800 001, Bihar

Performance Guarantee No. : 2014/002-PFRM

We have been informed that Daihon-dai Corporation. Tokyo, Japan, (hereinafter called “the principal”), has entered into contract No. 2014/0001/Cnt dated 15.July.2014 with you, for the supply of 1000 Metric Ton/Metric Tons of Stainless Steel.

Furthermore we understand that, according to the conditions of contract, a performance guarantee is required.

At the request of the principal, we The International Commerce Bank of Tokyo. hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of 300.000,00 USD (say Three 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 tender conditions, and
the respect in which the principal is in breach.

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

Proof of identity certificate issued and signed by our branch in beneficiary’s country or else one of our corresponding bank’s located in beneficiary’s country stating that the bank has verified beneficiary’s signature(s) appearing on the first demand of payment.

This guarantee shall expire on 15.December.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.