DEED OF GUARANTEE FOR THE PERFORMANCE OF A CONTRACT

DEED OF GUARANTEE FOR THE PERFORMANCE OF A CONTRACT

This Deed of Guarantee is executed on this ____ day of ________, 20, by and between:

1. Guarantor:

Shri __________, son of Shri __________, residing at __________ (hereinafter referred to as the "Guarantor", which expression shall, unless repugnant to the subject or context, include his legal heirs, executors, administrators, representatives, and assigns).

2. Principal:

Shri __________, son of Shri __________, residing at __________ (hereinafter referred to as the "Principal", which expression shall, unless repugnant to the subject or context, include his legal heirs, executors, administrators, representatives, and assigns).

WHEREAS:

1. The Contract:
   The Principal has entered into an agreement dated __________ with Shri __________ (hereinafter referred to as the “Contractor”), residing at __________, for the execution and completion of certain works, the nature, scope, and terms of which are outlined in the said agreement. The Contractor has undertaken to carry out and complete the said works in accordance with the terms and conditions set forth therein.

2. Requirement of a Guarantee:
   As a condition precedent for the entrustment of work to the Contractor, the Principal has required the Contractor to furnish a performance guarantee to ensure faithful execution of the contract. In compliance with this requirement, the Guarantor has voluntarily agreed to stand as a surety and provide an irrevocable guarantee for the due performance of the Contractor’s obligations under the contract.

3. Indemnification:
   The Guarantor has agreed to indemnify and keep indemnified the Principal against all losses, damages, claims, costs, charges, or expenses that may arise due to any breach, non-performance, or failure on the part of the Contractor in fulfilling his obligations as per the contract.

NOW, THEREFORE, IN CONSIDERATION OF THE ABOVE, THE PARTIES AGREE AS FOLLOWS:

1. Guarantee for Due Performance

The Guarantor hereby unconditionally and irrevocably guarantees that the Contractor shall duly perform, execute, and complete the works in accordance with the contract terms, specifications, and agreed timelines. Unless the Contractor is relieved of performance by operation of law, statutory provisions, contractual clauses, or by virtue of a decision of a competent tribunal or court, the Guarantor undertakes full responsibility to ensure that the Contractor performs the contract without failure, delay, or deviation.

2. Liability of the Guarantor

(a) In the event of any default, negligence, breach, or non-performance by the Contractor, the Guarantor shall indemnify and keep indemnified the Principal from and against all direct and consequential losses, damages, penalties, liabilities, claims, costs, and expenses incurred due to such breach or failure.

(b) The liability of the Guarantor shall be absolute and unconditional and shall not be affected by any variation, amendment, modification, extension, forbearance, or waiver of any provision of the contract made between the Principal and the Contractor.

(c) The Guarantor agrees that its liability shall be co-extensive with that of the Contractor and shall continue until the satisfactory completion of the contract, unless released in writing by the Principal.

3. Invocation of Guarantee

(a) In the event that the Contractor fails to perform or breaches any terms of the contract, the Principal shall have the right to invoke this guarantee and recover the losses, damages, costs, and expenses from the Guarantor.

(b) The Guarantor agrees that the Principal shall not be required to first establish the liability of the Contractor before proceeding against the Guarantor.

4. Dispute Resolution and Arbitration

(a) In case of any dispute or difference regarding the extent or quantum of losses, damages, costs, or expenses, such dispute shall be referred to arbitration.

(b) If both parties mutually agree, the arbitration shall be conducted by a sole arbitrator, who shall be an architect or engineer. In the absence of mutual agreement, the arbitration shall be conducted by two arbitrators, one to be appointed by each party, and an umpire in case of disagreement.

(c) The arbitration proceedings shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (or any statutory modifications or reenactments thereof).

(d) The decision of the arbitrator(s) shall be final and binding on all parties.

5. Continuing Obligation

The guarantee provided herein shall remain in force and binding until the completion of the contract, subject to any extensions granted by the Principal or any variations in contract terms. The liability of the Guarantor shall not be discharged, diminished, or affected by any act of indulgence, forbearance, or extension of time granted to the Contractor by the Principal.

6. Governing Law and Jurisdiction

This Deed of Guarantee shall be governed by and construed in accordance with the laws of India. The courts having jurisdiction over __________ (location) shall have exclusive jurisdiction over all matters arising out of or in connection with this agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Deed of Guarantee on the day, month, and year first above written.

SIGNED, SEALED, AND DELIVERED BY:

1. Guarantor:
   Signature: __________
   Name: __________
   Address: __________

2. Principal:
   Signature: __________
   Name: __________
   Address: __________

Witnesses:

1. Signature: __________ Name: __________ Address: __________
2. Signature: __________ Name: __________ Address: __________