Parent company guarantee—contractor friendly
Produced in partnership with Peter Jansen of Keystone Law
Last updated on 27/07/2020

The following Construction precedent produced in partnership with Peter Jansen of Keystone Law provides comprehensive and up to date legal information covering:

  • Parent company guarantee—contractor friendly
  • Background

Parent company guarantee—contractor friendly

This Guarantee is made the [insert date] day of [insert month] 20[insert month]

Parties

  1. 1

    [insert name of Guarantor] (Company No. [insert company number]) [of OR whose registered office is at] [insert address] (the ‘Guarantor’ which expression shall include its successors in title and permitted assigns); and

  1. 2

    [insert name of Employer] (Company No. [insert company number]) [of OR whose registered office is at] [insert address] (the ‘Employer’ which expression shall include its successors in title and permitted assigns).

Background

    1. (A)

      By an agreement in writing (the ‘Contract’) dated [insert date] made between (1) the Employer and (2) [insert name of Contractor] Company (No. [insert company number]) (the ‘Contractor’) the Contractor has agreed to [design OR complete the design of] and construct (the ‘Works’)

    1. (B)

      The Guarantor has agreed to guarantee the due performance by the Contractor of its obligations under the Contract.

It is agreed:

    1. 1

      In consideration of the Employer entering into the Contract with the Contractor, the Guarantor irrevocably and unconditionally guarantees to the Employer, the due performance of all the Contractor's obligations and liabilities under the Contract, including the Contractor's compliance with all its terms and conditions according to their true intent and meaning.

    1. 2

      If the Contractor shall be in breach of any of its obligations under or shall otherwise fail to comply with the Contract, the

Related documents:
Key definition:
Parent company guarantee definition
What does Parent company guarantee mean?

A promise by another company, usually the holding company, to take responsibility for any shortfall in the pension fund if the sponsor employer fails.

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