Parent Company Guarantee (B149)

Who can use this contract?

This parent company guarantee is for use where a company entering into a contract is required by its client to provide a guarantee of performance from its parent company.

What is this contract for?

The main aim of a parent company guarantee is to give the client some security.  If the client’s contractor fails to perform or becomes insolvent, the client has can claim under the parent company guarantee.  The parent company then either to perform the contract or pay the losses incurred by the client as a result of the subsidiary’s default.

What are the main issues?

While fairly balanced, this document is drafted from the parent company’s perspective and the wording makes it clear that the parent company’s liability only arises if its subsidiary commits a breach of its contract and fails to rectify the breach.

The liability of the parent is limited so that it will be no greater than that of the subsidiary under its contract with the client.

You can use this document if you are a company acting as guarantor for a subsidiary’s contracts, and want clarity on the terms of your guarantee agreement.

What detailed terms does the contract contain?

The main points cover:

• guarantee
• notice of liability
• liability
• amendment
• timeframe
• notices between parties
• assignment
• third party rights
• 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 experienced lawyers write all our templates, 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.  For more information see our Legal Services page.

Contract Author – Giles Dixon

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