Parent company guarantee—employer friendly
Produced in partnership with Peter Jansen of Keystone Law

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—employer friendly
  • Background

Parent company guarantee—employer friendly

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

Parties

  1. 1

    [insert name] (Company No. [insert number]) of/whose registered office is at [insert address] (the ‘Guarantor’); and

  1. 2

    [insert name] (Company No. [insert number]) of/whose registered office is at [insert address] (together with its successors and assigns, the ‘Employer’).

Background

    1. (A)

      By a contract dated [insert date] (‘the Contract’) and made between (1) the Employer and (2) [insert name] (‘the Contractor’), the Contractor has agreed to execute and complete certain works (‘the Works’) upon the terms and conditions contained in the Contract.

    1. (B)

      Pursuant to the terms of the Contract, the Contractor has agreed to procure the provision of a guarantee in the terms hereof (the ‘Guarantee’). The Contractor is a wholly owned subsidiary of the Guarantor.

    1. (C)

      At the request of the Contractor, the Guarantor has agreed to guarantee performance of the Contract by the Contractor.

It is hereby agreed as follows:

    1. 1

      In consideration of the Employer entering into the Contract with the Contractor, the Guarantor irrevocably and unconditionally guarantees to the Employer as a primary obligation and not merely as a surety due performance by the Contractor of all of its obligations and liabilities under and in accordance with the Contract and undertakes to the Employer that:-

      1. 1.1

        in the event of any breach of the Contractor's obligations under the Contract

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