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PRO FORMA

RETENTION MONEY GUARANTEE

ISSUED TO : ........................................................................ (hereinafter referred to as "the Employer")

ON BEHALF OF:.................................................................... (hereinafter referred to as "the Contractor")

in connection with

CONTRACT NO ..................................................................... (hereinafter referred to as "the Contract")

WHEREAS the Employer and the Contractor have agreed that the Contractor may provide a guarantee in lieu of the whole or portion of the retention monies provided for under the Contract;

NOW THEREFORE we, the undersigned, undertake, in accordance with the following provisions, to pay to the Employer such amounts as the Employer may, from time to time, demand from us.

2.    The Engineers certificate referred to in Clause 1 shall certify

    (a) that he is the Engineer in office as such in terms of the Contract,

    (b) that the Contractor is in breach of his obligations under the Contract, and

      (i)    does not exceed the amount of retention monies which, but for this guarantee, would have been
            retained by the Employer in terms of the Contract at the date of the certificate, less the aggregate of
            the amounts of retention money actually retained by the Employer and the amounts previously paid by
            us to the Employer in terms hereof, and

       (ii)   does not exceed a genuine estimate of the cost to the Employer of having the breach referred to in
             paragraph (b) remedied less the aggregate of any amounts withheld by the Employer from payments
             due to the Contractor in terms of the Contract by reason of the breach referred to, and any amount
              of retention money actually held by the Employer save to the extent that the same had been  
            deducted from any previous demand in terms hereof.

3.    We shall within ...... days after our receipt of a demand complying with the provisions of Clauses 1 and 2 
       make payment to the Employer of the amount demanded at ........................................ or at such other
       address in .............................. as the Employer shall in writing notify to us.

4.    Subject to compliance with the provisions hereof, our liability to make the payments herein referred to shall
      be unconditional and shall not be affected or diminished by any disputes, claims or counterclaims between
      the Employer and the Contractor.

5.    Our aggregate liability under this guarantee is limited to R .................................................................

6.    This guarantee shall expire on the date on which the last of the retention monies, which but for this
       guarantee would have been retained by the Employer, becomes payable to the Contractor.

Signed in the presence of the subscribing witnesses:

As witnesses:

© Copyright 1990 by the South African Institution of Civil Engineering. ® All rights reserved