Contractual guarantees · BG · PG · APG
Tenders, supply contracts and construction projects often require a performance guarantee or an advance payment guarantee. We help you review what is being asked, align the text with the contract and coordinate the request.
A performance guarantee protects the buyer or project owner if the contractor or supplier does not perform the contract as agreed. It is usually a percentage of the contract value, valid until delivery, acceptance or the end of a warranty period.
An advance payment guarantee secures the repayment of a down payment if the supplier or contractor does not deliver. Its amount often reduces as deliveries or milestones are completed, according to a mechanism set out in the guarantee.
We advise you and coordinate the request. Guarantees are issued by banks, insurers or other authorised institutions, after their own assessment.
Illustrative example
An engineering company in Spain wins a contract to install a water treatment unit in Senegal. The client will pay a 20% advance at signature, against an advance payment guarantee, and asks for a 10% performance guarantee valid until provisional acceptance.
Points to review: the wording imposed by the client, the reduction of the advance guarantee as works progress, the expiry dates and the governing rules. We go through these with the contractor before the request is presented.
This scenario is illustrative. It does not describe a transaction completed by Star Alliance Consulting.
A summary is enough to start. We will ask for specific documents once the operation has been discussed.
You describe the contract and the guarantee requested.
We review the contract clauses and the proposed guarantee text.
We prepare the file and the wording to propose.
We follow the exchanges until a decision is reached.
The terms are often used interchangeably. What matters is the text: whether the guarantee is payable on first demand, which documents are required and which rules apply (for example URDG 758).
Often, yes, but some clauses can create unnecessary risk or be refused by the issuing institution. We flag those points so that they can be discussed early.
Yes, and it is recommended: the guarantee terms can still be negotiated, and you can anticipate the timeline.
They depend on the amount, the duration, the contract, the parties and the issuing institution. We give you an indication after reviewing the file.
Tell us about it in a few lines. We will reply with an honest view of the options and the next steps.
Or write to us at info@starallianceconsult.com
