CONDITIONS APPLICABLE TO VARIABLE AND FIXED PERFORMANCE GUARANTEES Sample Clauses
This clause defines the rules and requirements that apply to both variable and fixed performance guarantees within a contract. It typically outlines the conditions under which each type of guarantee must be provided, maintained, or released, and may specify the forms these guarantees can take, such as bank guarantees or insurance bonds. By establishing clear criteria for performance guarantees, the clause ensures that parties understand their obligations and the security mechanisms in place, thereby reducing the risk of non-performance and disputes.
CONDITIONS APPLICABLE TO VARIABLE AND FIXED PERFORMANCE GUARANTEES. 3.1 The Guarantor hereby acknowledges that:
3.1.1 Any reference in this Performance Guarantee to the Contract is made for the purpose of convenience and shall not be construed as any intention whatsoever to create an accessory obligation or any intention whatsoever to create a suretyship.
3.1.2 Its obligation under this Performance Guarantee is restricted to the payment of money.
3.2 Subject to the Guarantor’s maximum liability referred to in 1.1 or 2.1, the Guarantor hereby undertakes to pay the Employer the sum certified upon receipt of the documents identified in 3 2.1 to 3.2.3:
3.2.1 A copy of a first written demand issued by the Employer to the Contractor stating that payment of a sum certified by the Employer's Agent in an Interim or Final Payment Certificate has not been made in terms of the Contract and failing such payment within seven (7) calendar days, the Employer intends to call upon the Guarantor to make payment in terms of 3.2.2;
3.2.2 A first written demand issued by the Employer to the Guarantor at the Guarantor’s physical address with a copy to the Contractor stating that a period of seven (7) days has elapsed since the first written demand in terms of 3.2.1 and the sum certified has still not been paid;
3.2.3 A copy of the aforesaid payment certificate which entitles the Employer to receive payment in terms of the Contract of the sum certified in 3.2.
3.3 Subject to the Guarantor’s maximum liability referred to in 1.1 or 2.1, the Guarantor undertakes to pay to the Employer the Guaranteed Sum or the full outstanding balance upon receipt of a first written demand from the Employer to the Guarantor at the Guarantor’s physical address calling up this Performance Guarantee, such demand stating that:
3.3.1 the Contract has been terminated due to the Contractor’s default and that this Performance Guarantee is called up in terms of 3.3; or
3.3.2 a provisional or final sequestration or liquidation court order has been granted against the Contractor and that the Performance Guarantee is called up in terms of 3.3; and
3.3.3 the aforesaid written demand is accompanied by a copy of the notice of termination and/or the provisional/final sequestration and/or the provisional liquidation court order.
3.4 It is recorded that the aggregate amount of payments required to be made by the Guarantor in terms of 3.2 and 3.3 shall not exceed the Guarantor’s maximum liability in terms of 1.1 or 2.1.
3.5 Where the Guarantor has made payment in terms of 3.3, the Emp...
CONDITIONS APPLICABLE TO VARIABLE AND FIXED PERFORMANCE GUARANTEES. The Guarantor hereby acknowledges that: