The below text is a copy of the Industry Standard Advanced Payment Bond Wording. Feel free to copy and paste this into your tender documentation or please get in touch and we shall be happy to provide you with a fully drafted copy which includes your company details and the specifics of your upcoming contract. Simply click here. Insert your name and email address, Type "Advanced Payment Bond Wording" in the subject line and your company details in the message and we shall provide you with a drafted wording as soon as possible.
For a quick explanation of advanced payment bonds please read our blog on the subject. Advance Payment Bonds Explained in 5 minutes (pssurety.co.uk)
ADVANCE PAYMENT BOND
THIS GUARANTEE BOND is made as a deed BETWEEN the following parties whose names and registered office addresses are set out in the Schedule to this bond (the Schedule):
(1) The Contractor as principal;
(2) The Guarantor as guarantor; and
(3) The Employer
WHEREAS:
(A) By a contract (the Contract) entered into or to be entered into between the Employer and the Contractor particulars of which are set out in the Schedule the Contractor has agreed with the Employer to execute works (the Works) upon and subject to the terms and conditions therein set out
(B) The Employer has agreed to pay the sum set out in the Schedule as an advance payment (the Advance Payment) to the Contractor pursuant to the Contract
(C) The Guarantor has agreed with the Employer at the request of the Contractor to guarantee the application of the Advance Payment by the Contractor in the performance of its obligations under the Contract upon the terms and conditions of this Guarantee Bond subject to the limitation set out in Clause 2.
NOW THIS DEED WITNESSES as follows:
1. The Guarantor subject to the provisions of this Guarantee Bond guarantees to the Employer that if in breach of the Contract the Contractor shall fail to apply the Advance Payment in the execution of the Works the Guarantor shall satisfy and discharge the damages sustained by the Employer as established and ascertained pursuant to and in accordance with the provisions of and by reference to the Contract and taking into account all sums due or to become due to the Contractor.
2. The maximum aggregate liability of the Guarantor and the Contractor under this Guarantee Bond shall not exceed the sum set out in the Schedule (the Bond Amount) as reduced in accordance with Clause 3 but subject to such limitation and to Clause 5 the liability of the Guarantor shall be co-extensive with the liability of the Contractor under the Contract in respect of the Advance Payment.
3. The Bond Amount shall be automatically reduced by the value of the Works (as determined in accordance with the Contract) executed by the Contractor and each certificate issued under the Contract in respect of such value shall be conclusive for the purposes of this Bond.
4. The Guarantor shall not be discharged or released by any alteration of any of the terms conditions and provisions of the Contract or in the extent or nature of the Works and no allowance of time by the Employer under or in respect of the Contract or the Works shall in any way release reduce or affect the liability of the Guarantor under this Guarantee Bond.
5. Whether or not this Guarantee Bond shall be returned to the Guarantor the obligations of the Guarantor under this Guarantee Bond shall be released and discharged absolutely upon repayment in full by the Contractor to the Employer of all advance payments in accordance with the Contract (the Expiry) save in respect of any breach of the Contract which has occurred and in respect of which a claim in writing containing particulars of such breach has been made upon the Guarantor before Expiry.
6. The Contractor having requested the execution of this Guarantee Bond by the Guarantor undertakes with the Guarantor (without limitation of any other rights and remedies of the Employer or the Guarantor against the Contractor) to apply the Advance Payment in discharge of the obligations on its part set out in the Contract.
7. This Guarantee Bond and the benefit thereof shall not be assigned without the prior written consent of the Guarantor and the Contractor.
8. This Guarantee Bond shall be governed by and construed in accordance with the laws of England and Wales and the courts of England and Wales shall have jurisdiction hereunder.
THE SCHEDULE
The Contractor: [company details] (Company No. [company no.]) whose registered office address is at [address]
The Guarantor: [company details] (Company No. [company no.]) whose registered office address is at [address]
The Employer: [beneficiary of the bond] (Company No. [company number]) whose registered office address is at [address]
The Contract: A contract dated the [date] 2015 between the Employer and the Contractor for the [details of works]
The Advance Payment: £amount ([in words] STERLING)
The Bond Amount: The sum of £amount ([in words] STERLING) which shall reduce in accordance with Clause 3
Expiry: [fixed expiry]
IN WITNESS whereof the Guarantor and the Contractor have executed and delivered this Guarantee Bond as a Deed this _____ day of ______________ 20 __
EXECUTED as a DEED by [company] LIMITED by the signature of a director and the company secretary or of two directors of the company:
)
)
)
)
.........................................................................
Director
.........................................................................
Director/Company Secretary
EXECUTED as a DEED by [THE GUARANTOR] by the signature of a director and the company secretary or of two directors of the company
)
)
)
)
.........................................................................
Director
.........................................................................
Director/Company Secretary
EXECUTED as a DEED by [beneficiary] LIMITED by the signature of a director and the company secretary or of two directors of the company:
)
)
)
)
.........................................................................
Director
.........................................................................
Director/Company Secretary