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BBAC non-performance guarantee
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| | BBAC non-performance guarantee
Bank guarantees are easily the most important for protecting buyers against non-performance of international contracts. The usual form of guarantee is complementary to, but legally independent of, the underlying commercial contract. The bank undertakes to pay the buyer a definite sum of money if the seller fails to meet his contractual obligations. Guarantees of this type have become a very important feature of international tendering. Foreign buyers now demand guarantees against many kinds of risk, especially in the case of major projects. The most commonly sought types of guarantee are tender bonds, performance bonds and advance payment guarantees.
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