Payment Guarantee Letter Template (A191)

What is this Payment Guarantee for?

This payment guarantee is for use where the payment obligations of a company buying goods or services under a contract with a supplier are guaranteed by the buyer’s parent company or some other third party.

What are the main issues?

The payment guarantee needs a clear statement of the guarantor’s obligations – i.e. an unconditional promise to make any payment that the buyer under the contract fails to make.

Timing is important as well as the way that a notice requiring payment will be given to the guarantor.

How long the guarantor will have this liability also needs to be spelt out.  It will usually continue for as long as the buyer under the contract has a liability to the supplier.

What detailed terms does the Payment Guarantee contain?

In six clauses the document covers

• the Buyer’s payment obligations
• payment by the Guarantor
• the liability of the Guarantor
• notices
• governing law.

For more information on each of these sections, see our Explanatory Notes  which you will receive when you download the document from our website.

For information on signing documents see our Contract Signing page

When I download the document, can I change it and/or use it more than once?

Yes, all ContractStore’s templates are in MS Word and you can use the contract on more than one project. For more information, watch the video on this page of our website or see our FAQs

Legal support

ContractStore supplies templates and is not a law firm.  But all our templates are written by experienced lawyers so we can arrange legal assistance for customers who need special terms in one of our documents or a bespoke template. . For more information see our Legal Services page.

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