The Bid Bond Bank Guarantee is a crucial document in Indian tender processes, particularly in high-value procurement, construction, and infrastructure projects. It serves as a risk mitigation tool for tender issuers, ensuring that only serious bidders participate in the tender process. When a company wishes to bid for a project, the tender typically requires submission of a bid security, which can be provided in the form of a bank guarantee. The bank, upon the bidder's request, issues this guarantee undertaking to pay a specified amount to the beneficiary if the bidder withdraws their bid during the validity period, fails to sign the contract if awarded, or doesn't provide the required performance security. This document must comply with Reserve Bank of India guidelines and is governed by Indian banking and contract laws, making it a legally enforceable instrument in Indian courts.
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1. Bank Details and Reference Number: Complete details of the issuing bank branch and unique guarantee reference number
2. Beneficiary Details: Full name and address of the party receiving the guarantee (typically the tender issuing authority)
3. Bidder Details: Complete information about the bidder on whose behalf the guarantee is being issued
4. Tender Reference: Details of the tender/bid including tender number, project name, and date
5. Guarantee Amount: The specific amount of the guarantee in figures and words
6. Guarantee Period: Validity period of the guarantee including start and end dates
7. Trigger Events: Specific conditions under which the guarantee can be invoked
8. Payment Clause: Bank's unconditional obligation to pay upon valid invocation
9. Notice Requirements: Process and format for invoking the guarantee
10. Jurisdiction Clause: Governing law and jurisdiction for dispute resolution
1. Extension Clause: Used when there might be a need to extend the validity period of the guarantee
2. Return of Guarantee: Include when specific conditions for return of the original guarantee document need to be specified
3. Multiple Beneficiaries: Required when the guarantee is issued in favor of multiple parties
4. Assignment Restriction: Include when transfer or assignment of the guarantee needs to be explicitly restricted
5. Claim Period: Optional clause specifying additional period after expiry during which claims can be made
1. Format of Demand Notice: Standard format for beneficiary to make a demand under the guarantee
2. Copy of Tender Notice: Reference document showing the original tender requirements
3. Authority Letter: Document confirming the authority of bank signatories
4. Bid Details: Summary of the bid amount and key terms referenced in the guarantee
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