Guarantee by Individual or Company of Performance of Sole Trader (Limited)
This Guarantee by Individual or Company of Performance of Sole Trader (Limited) is designed for use in connection with a contract under which a sole trader working as a consultant/contractor carries out a particular project, or set of works or services for a client/customer. It can be used where the client/customer decides only to enter into a contract with the sole trader if the client/customer first receives a performance guarantee from a third party, i.e. a guarantee that the sole trader will carry out and complete the project, works or services in accordance with the contract.
The document is a legally binding document in the form of a Deed and it provides for an individual or company to sign it as guarantor, and also for the client/customer and the sole trader to sign it. If the sole trader fails to comply with the contract, the client/customer can then call on the guarantor under this document to put right the failure and/or compensate the client/customer for the failure.
The client/customer might ask for such a guarantee where it is concerned that if the sole trader fails to perform the contract, the financial resources of the sole trader will not be sufficient to meet its liabilities to the client/customer under the contract. The client/customer will however need to be satisfied that the guarantor’s financial strength is sufficient to meet the guarantor’s potential liabilities under the guarantee. If the client/customer considers that neither the sole trader nor the guarantor can be relied upon to meet the performance obligations under the contract, the client/customer should consider whether some other form of security for performance can be made available by the sole trader or guarantor.
This template is only intended for a “one off” project or set of works/services, not for any arrangements under which the sole trader and client/customer from time to time agree on works/services which are not identified at the time when the guarantee is signed. If any further works/services are later agreed on, a further guarantee covering those further works/services should then be signed.
This Guarantee by Individual or Company of Performance of Sole Trader (Limited) contains a limit on the maximum amount of money for which the guarantor may be liable. If an unlimited liability is instead required then you are advised to download and use the Guarantee by Individual or Company of Performance of Sole Trader (Unlimited).
The individual or company acting as the guarantor may or may not have a financial or commercial interest in, connection or relationship with, the sole trader. An introductory paragraph in the document contains in square brackets alternative statements about any connection between the sole trader and the guarantor so that the supplier can select the relevant option.
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Guarantee by Individual or Company of Performance of Sole Trader (Limited) is part of Business Documents. Just £35.00 + VAT provides unlimited downloads from Business Documents for 1 year.