An example of a performance bond issued on the back of a counter-guarantee, made on demand by the local issuing bank

PERFORMANCE BOND NO BA 38769/C

Whereas our bank stands as joint and several surety for the debtor and as joint and several co-debtor for the definite guarantee fund of USD 150,000 (one hundred and fifty thousand US dollars), which the below-mentioned contractor is obliged to arrange, in order to ensure full performance of the contract 347 of 20 February 2016 between Shirat Shipyard Co, PO Box 29031, 02451 Istanbul (the buyer) and the contractor Majestic Lift Machinery, PO Box 3465, Mumbai 60312, concerning delivery and installation of three heavy lift transportation systems.

We hereby undertake and state, on behalf of the bank, and as responsible representatives with full power to affix our signature that, in the event our bank is notified in writing by the buyer that the contractor has violated the provisions of the contract and/or has failed to perform his undertakings completely or partially, the amount under surety will be paid in cash and in full, immediately and without delay to the buyer or their order, upon their first written request, without the need to resort to any legal procedure or to issue a protest or to obtain a court order or the contractors consent. This bond has been issued upon the counter-guarantee of India Trade Bank Ltd, Mumbai (NO 18346), dated 19 March 2016.

1. Refer to this article performance bond example to answer the following questions:

1. Who is the principal?

1. Who is the beneficiary?

1. Who is the issuer?

1. Who is the adviser?

1. Is the adviser merely giving advice or is it taking any risk?

1. What is it that is being guaranteed?

1. What is the FORM of the guarantee?