What does bank guarantee mean?

Bank guarantee, also known as "bank guarantee" and "bank credit guarantee", is a guarantee document issued by a bank as a guarantor to the beneficiary. When the bank guarantees that the guaranteed person fails to perform an obligation to the beneficiary, the bank shall bear the payment responsibility stipulated in the letter of guarantee. The content of the letter of guarantee varies according to the specific transactions, and there is no certain format in form, and there is no certain agreement on the rights and obligations of the relevant parties and the provisions of the handling procedures. In case of different interpretations, specific explanations can only be made according to the contents of the document itself.

The contents of a bank guarantee vary from transaction to transaction, but usually include the following contents:

1. The basic columns include: the number of the financing guarantee of United Bank of China, the date of issuance, the names and addresses of all parties, the names of related transactions or projects, the number of related contracts or tenders, the date of signing or issuing, etc.

2. The liability clause is the liability clause promised by the bank or other financial institution that issued the letter of guarantee, and it is the subject of the bank letter of guarantee.

3. The amount of guarantee is the maximum amount that the bank or other financial institution that issues the letter of guarantee bears, which can be a specific amount or a certain proportion of the relevant amount in the contract. If the guarantor can reduce or exempt the liability according to the extent of the client's performance of the contract, it must make a specific explanation.

4. The validity period is the latest claim date or expiration date, which can be a specific date or a period of time after an act or event. For example: three or six months after delivery, 30 days after the completion of the project, and so on.