Letter of guarantee, also known as letter of guarantee, refers to a written credit guarantee certificate issued by a bank, insurance company, guarantee company or individual to a third party at the request of the applicant. Guarantee that when the applicant fails to perform the responsibilities or obligations as agreed by both parties, the guarantor will perform certain payment responsibilities or economic compensation responsibilities for a certain amount and within a certain period. A guarantee is a guarantee. For convenience, most companies and banks have printed letters of guarantee in a certain format. Its functions include delivering goods by letter of guarantee, issuing clean bills of lading by letter of guarantee and countersigning advance bills of lading by letter of guarantee.
Legal basis: Bidding Law of People's Republic of China (PRC).
Article 46 A tenderer and a winning bidder shall, within 30 days from the date of issuance of the bid-winning notice, conclude a written contract in accordance with the tender documents and the bid documents of the winning bidder. The tenderer and the winning bidder shall not conclude other agreements that deviate from the substantive contents of the contract.
If the tender documents require the winning bidder to submit the performance bond, the winning bidder shall submit it.
Article 60 If the winning bidder fails to perform the contract signed with the tenderer, the performance bond will not be returned, and if the losses caused to the tenderer exceed the amount of the performance bond, it shall compensate for the excess; If the performance bond is not submitted, it shall be liable for the losses of the tenderer.
If the winning bidder fails to perform his obligations in accordance with the contract concluded with the tenderer, if the circumstances are serious, his bidding qualification for participating in the project subject to tender according to law within two to five years shall be cancelled and announced until the business license is revoked by the administrative department for industry and commerce.
If the contract cannot be performed due to force majeure, the provisions of the preceding two paragraphs shall not apply.