Prequalifies the contractor and provides the necessary security to the beneficiary necessitating the guarantee that the contractor will enter into the contractor if it is awarded.
Protects the beneficiary for the prepayments of monies advanced to the contractor, usually covers the cost of the materials.
Protects the beneficiary against increased cost in the event of the contractor not performing and fulling their obligations. Guaranteed value is stipulated by the beneficiary
Covers the maintenance – Provides protection to the beneficiary from defective workmanship after completion and during the maintenance periods.
A retail fuel guarantee acts as a form of security to the oil company when they extend their credit line to the retailer, protecting them against any possible payment default by the retailer.
