BANK GUARANTEE ON BEHALF OF A CONTRACTOR IN LIEU OF EARNEST MONEY
In consideration of the…………….Corporation (hereinafter called "the Corporation") having agreed to exempt …………….(hereinafter called "the said Contractor") from the demand, under the terms and conditions of an Agreement dated…………….made between Corporation and…………….(hereinafter called "the said Agreement") of Earnest Money deposit for the due fulfilment by the said Contractor of the terms and conditions contained in the said Agreement, on production of a Bank guarantee for Rs …………….we . …………….Bank, (hereinafter referred to as "the Bank") do hereby undertake to pay to the Corporation an amount not exceeding Rs…………….against any loss or damage caused to or suffered or would be caused to or suffered by the Board by reason of any breach by the said Contractor of any of the terms or conditions contained in the said Agreement.
2. We …………….Bank, do hereby undertake to pay the amounts due and payable under this guarantee without any demur, merely on a demand from the Corporation stating that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the Corporation by reason of any breach by the said Contractor of any of the terms or conditions contained in the said Agreement or by reason of the Contractors failure to perform the said Agreement. Any such demand made on the Bank shall be conclusive as regards the amount due and payable by the Bank under this guarantee. However, our liability under this guarantee shall be restricted to an amount not exceeding Rs . …………………………..
3. We …………….Bank, further agree and undertake that the guarantee herein contained shall remain in full force and effect during the period that would be taken for the performance of the said Agreement and that it shall continue to be enforceable till all the dues of the…………….Corporation under or by virtue of the said Agreement have been fully paid and its claims satisfied or discharged or till the Corporation certifies that the terms and conditions of the said Agreement have been fully and properly carried out by the said Contractor and accordingly discharges the guarantee. Unless a demand or claim under this guarantee is made on us in writing on or before the…………….we shall be discharged from all liability under this guarantee thereafter.
4. We …………….Bank, further agree with the Corporation that the Corporation shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said agreement or to extend time of performance by the said Contractor from time to time or to postpone for any time or from time to time any of the powers exercisable by the Corporation against the said Contractor and to forbear or enforce any of the terms and conditions relating to the said Agreement and we shall not be relieved from our liability by reason of any such variation or extension being granted to the said Contractor or for any forbearance, act or omission on the part of the Corporation or any indulgence by the Corporation to the said Contractor or by any such matter or thing whatsoever which under the law relating to sureties would but for this provision have effect of so relieving us.
5. We…………….Bank, further undertake and agree not to revoke this guarantee during its currency except with the previous consent of the Corporation in writing.
Dated, the ……………. for…………….Bank