{jcomments on}Performance Bond No. ref..

To  (Full name and address)

Dear Sirs,

You have concluded  on /date ……… contract No with Messrs……….(company name)  for the purchase of: (A brief description of the contract details is Following- quantity, price, shipment, quality specs… ) As security for the due performance of the contract (………….)an indemnity by a bank shall be furnished.

At the request of  (company name) we, herewith irrevocably undertaken to pay you on first demand, irrespective of the validity and the legal effects of the above mentioned contract and waiving all rights of objection and defense arising therefrom, the amount of the 5% of the total contract value of usdollars .. (in words dollars.............) upon receipt of your duly signed request for payment stating that Messrs ............, have failed to fulfil their contractual obligations.

For the purpose of identification, your request for payment in writing has to be presented to us through the intermediary of a first rate bank confirming that the signatures thereon are legally binding upon you.

Your claim is also acceptable if transmitted to us in full by duly encoded telex/cable/swift through a first rate bank confirming that your original claim has been sent to us by registered mail and that the signatures thereon are legally binding upon you.

Your claim will be considered as having been made once we are in possession of your written request for payment or the telex or cable or swift to this effect at our above address.

Our indemnity is valid until (................) (in words..............)

and expires in full and automatically if your claim has not been made on or before that date, regardless of such date being a banking day or not.

(Option: The performance bond will also expire in full and automatically once all merchandise has been discharged and all amounts pending (i.e.) have been paid to buyers.
This performance bond is subject of Uniform Rules for Demand guarantees, ICC Publication No. 458
This indemnity is not assignable without prior written authorization of (Bank Name).

Yours very truly,
(Bank Name).