A bank guarantee ensures a refund in the case where one of the two parties would not be able to honor the contract.
THERE ARE DIFFERENT TYPES OF BANK GUARANTEE:
THE GUARANTEE OF PAYMENT
This is the most common bank guarantee, which covers the case where a seller requires a guarantee to the buyer if it cannot pay its due.
They allow the buyer to be compensated in the case where the supplier withdraws its offer, does not sign the contract, or does not provide the guarantees expected.
THE GUARANTEE OF ADVANCE PAYMENT
It allows you to reimburse downpayments if the supplier does not provide on its commitment.
THE PERFORMANCE BOND OR GOOD END
It allows compensating the buyer in the case where the supplier does not comply with the terms of the contract.
EXEMPTION FROM HOLDBACK
It gives the seller the opportunity to collect the balance payment before the end of the warranty period.
THE GUARANTEE OF PAYMENT OF IMPORT
It concerns the importers who want to make easier their trade abroad.