Document background
The Corporate Performance Guarantee is a crucial document in Dutch commercial practice, commonly utilized when a stronger entity needs to provide financial backing for a less established or smaller entity's obligations. This document is particularly relevant in group company structures, project finance arrangements, or significant commercial contracts where additional security is required. The guarantee must be drafted in compliance with Dutch law requirements, including specific provisions of the Dutch Civil Code regarding formation, validity, and enforcement of guarantees. The document typically includes detailed provisions on the scope of guaranteed obligations, maximum liability, duration, demand procedures, and enforcement mechanisms. A Corporate Performance Guarantee is often required by banks, major clients, or project owners as a condition for entering into substantial commercial arrangements, and its terms must be carefully negotiated to balance the interests of all parties while ensuring enforceability under Dutch law.
