Common use of Guarantee Bond Clause in Contracts

Guarantee Bond. 51.1 If so provided for by the STC, the financial retention under the good performance/guarantee security may be replaced by a good performance/guarantee bond provided at the same time as the final invoice. The bond corresponding to the amount of the good performance/guarantee retention must be valid until the 5th working day after the expiry of the guarantee period. 51.2 If the Client draws on the guarantee bond in accordance with the provisions of the Agreement, the Contractor shall, within 5 days of the drawdown, supplement the guarantee bond to the amount of the original bank guarantee or provide a new bank guarantee accordingly, so that the Client has the original amount of the bank guarantee. Failing this, the Client shall be entitled to draw on the Contractor's bank guarantee in its possession and to treat the amount so drawn as a financial retention. 51.3 In the case of the provision of a bank guarantee, the Contractor shall in all cases consult the Client on the wording and conditions. 51.4 If the Contractor is subject to liquidation procedures or other proceedings for its termination without legal succession, or it has initiated its own bankruptcy during the guarantee period, the Client shall automatically be entitled for the guarantee security from the day before the institution of the liquidation procedure or other proceedings for the termination of the Contractor without legal succession, or the day of the bankruptcy. 51.5 The performance/good performance security provided by the Contractor may also be used to cover contractual penalties and legitimate claims for damages against the Contractor.