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The Advance Payment Guarantee Bond is a crucial financial instrument in Irish commercial practice, particularly used in situations where substantial advance payments are required for project execution. This document is typically required when a project owner or employer needs to make significant upfront payments to a contractor or supplier but wants security against the risk of non-performance or default. The guarantee, issued by a bank or financial institution under Irish law, provides assurance that the advance payment will be repaid if the contractor fails to fulfill their contractual obligations. The document includes specific provisions for making demands, reduction mechanisms as work progresses, and clear expiry conditions. It's particularly relevant in large-scale construction, infrastructure, and international trade transactions where Irish entities are involved or Irish law is chosen as the governing law.

1. Parties: Identifies the Guarantor (bank/financial institution), the Principal (contractor/supplier), and the Beneficiary (party making advance payment)

2. Background: Sets out the context of the underlying contract and advance payment arrangement

3. Definitions: Defines key terms used throughout the bond including 'Guaranteed Sum', 'Expiry Date', and 'Underlying Contract'

4. Guarantee: Core section stating the guarantee amount and the guarantor's commitment to pay

5. Terms of Demand: Specifies the conditions and process for making a demand under the guarantee

6. Reduction and Release: Details how the guarantee amount reduces over time and conditions for release

7. Expiry: States the validity period of the guarantee and expiry conditions

8. Assignment: Provisions regarding transfer or assignment of rights under the guarantee

9. Governing Law and Jurisdiction: Specifies Irish law as governing law and jurisdiction for disputes

10. Notices: Details how formal communications between parties should be made

11. Execution: Signature blocks and execution formalities