Performance Bond: How And To What Negotiate

In international commercial transactions, it is very common for the importer/owner to request the supplier/contractor to issue a Performance Bond (i.e., almost always an autonomous and on-demand guarantee) to be called in the event of breach of some of the contractual obligations, as agreed in the underlying contract.

In other articles we have already examined the risks associated with this type of guarantee and those deriving from the fact that it is often  /en/performance-bond-as-on-demand-guarantee" target='_blank' >an autonomous on-demand guarantee.

In this article we want to give you some practical advice on the riskiest clauses and how to negotiate them.

Usually in contracts of a certain value, the performance bond is drawn up by the purchaser or by the owner (the beneficiary of the guarantee).