Types of guarantee

Exporters seeking to win overseas contracts that are put out to tender may have to provide the importer with guarantees as part of the tendering process. Danske Bank offers a wide range of guarantees: bid bonds, advance payment bonds, performance bonds, retention bonds and payment guarantees.

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Guarantee, or bond, types

A bid bond (also called a tender bond) is issued to ensure that the exporter submits realistic bids under the tender process and to protect the importer for any loss that might occur if the exporter fails to sign the contract. A bid bond also assures the importer that the exporter will comply with the terms of the contract in the event that the tender is accepted. Bid bonds are usually issued for 2% to 5% of the tender amount.

Sample bid bond (demand type)
Sample bid bond (conditional type)

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