Part 3: Section 9 Contract Forms

Section 9. Contract Forms

Table of Forms

Agreement......................................................................................................... 54

Contract Security.............................................................................................. 55

Performance Bond............................................................................................ 56

Advance Payment Security............................................................................... 58

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Part 3: Section 9 Contract Forms

Agreement

THIS AGREEMENT made the ________ day of ________________________, 2011, between

MUDC, Ministry of Urban Development and Construction Tel.: +251 115 53 13 88 , Addis
Ababa, Ethiopia (hereinafter called “the Employer”), of the one part, and
____________________________ of ______________________________ (hereinafter called “the
Contractor”), of the other part:

Whereas the Employer is desirous that the Contractor execute the Construction of
_______________________ (hereinafter called “the Works”) and the Employer has accepted the Bid
by the Contractor for the execution and completion of such Works and the remedying of any defects
therein for the Contract Price of the equivalent of Ethiopian Birr _______________
(____________________).
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In this Agreement, words and expressions shall have the same meanings as are respectively
assigned to them in the Contract referred to.
2. In consideration of the payments to be made by the Employer to the Contractor as hereinafter
mentioned, the Contractor hereby covenants with the Employer to execute and complete the
Works and remedy any defects therein in conformity in all respects with the provisions of the
Contract.
3. The Employer hereby covenants to pay the Contractor in consideration of the execution and
completion of the Works and the remedying of defects therein the Contract Price or such
other sum as may become payable under the provisions of the Contract at the times and in the
manner prescribed by the Contract.
4 The Contract Price or such other sum as may be payable shall be paid in Ethiopian Birr.
IN WITNESS whereof the parties thereto have caused this Agreement to be executed in accordance
with the law specified in the Special Conditions of Contract on the day, month and year indicated
above.
Signed by ___________________________ (for the Employer)

Name:______________________________ Position:__________________________

Signed by ___________________________ (for the Contractor)

Name:______________________________ Position:___________________________

Witnesses
1. -------------------
2. -------------------

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Part 3. Section 9. Contract Forms

Note for Bidders: The Contract Security should be on the letterhead of the issuing Financial Institution
and should be signed by a person with the proper authority to sign documents that are binding on the Fi-
nancial Institution.

Contract Security
(Bank Guarantee)
Contract Security (Unconditional Bank Guarantee)
Date: [insert date]
Procurement Reference No.: [insert procurement reference number]
To: [name and address of Employer]
WHEREAS [name and address of Contractor] (hereinafter called “the Contractor”) has
undertaken, in pursuance of Contract No. [number] dated [date] to execute [name of Contract and
brief description of Works] (hereinafter called “the Contract”);
AND WHEREAS it has been stipulated by you in the said Contract that the Contractor shall furnish
you with a Bank Guarantee by a recognized bank for the sum specified therein as security for
compliance with his obligations in accordance with the Contract;
AND WHEREAS we have agreed to give the Contractor such a Bank Guarantee;
NOW THEREFORE WE hereby affirm that we are the Guarantor and responsible to you, on behalf
of the Contractor, up to a total of [amount of Guarantee] [amount in words], such sum being
payable in the types and proportions of currencies in which the Contract Price is payable, and we
undertake to pay you, upon your first written demand and without cavil or argument, any sum or
sums within the limits of [amount of Guarantee] as aforesaid without your needing to prove or to
show grounds or reasons for your demand for the sum specified therein.
We hereby waive the necessity of your demanding the said debt from the Contractor before
presenting us with the demand.
We further agree that no change or addition to or other modification of the terms of the Contract or of
the Works to be performed thereunder or of any of the Contract documents which may be made
between you and the Contractor shall in any way release us from any liability under this Guarantee,
and we hereby waive notice of any such change, addition, or modification.
This Guarantee shall be valid until a date 28 days from the date of issue of the Certificate of
Completion.
This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 458,
except that subparagraph (ii) of Sub-article 20(a) is hereby excluded.

Signature and seal of the Guarantor

Name of Financial Institution

Address
Date

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Part 3. Section 9. Contract Forms

Note for Bidders: The Performance Bond should be on the letterhead of the issuing Institution and
should be signed by a person with the proper authority to sign documents that are binding on the
Institution.

Performance Bond
By this Bond, [name and address of Contractor] as Principal (hereinafter called “the
Contractor”) and [name, legal title, and address of surety, bonding company, or insurance
company] as Surety (hereinafter called “the Surety”), are held and firmly bound unto [name
and address of Employer] as Obligee (hereinafter called “the Employer”) in the amount of
[amount of Bond] [amount of Bond in words], for the payment of which sum well and truly to
be made in the types and proportions of currencies in which the Contract Price is payable, the
Contractor and the Surety bind themselves, their heirs, executors, administrators, successors, and
assigns, jointly and severally, firmly by these presents.
Whereas the Contractor has entered into a Contract with the Employer dated the [day] day of
[month], [year] for [name of Contract] in accordance with the documents, plans,
specifications, and amendments thereto, which to the extent herein provided for, are by reference
made part hereof and are hereinafter referred to as the Contract.
Now, therefore, the Condition of this Obligation is such that, if the Contractor shall promptly
and faithfully perform the said Contract (including any amendments thereto), then this obligation
shall be null and void; otherwise it shall remain in full force and effect. Whenever the
Contractor shall be, and declared by the Employer to be, in default under the Contract, the
Employer having performed the Employer’s obligations thereunder, the Surety may promptly
remedy the default, or shall promptly:
(1) Complete the Contract in accordance with its terms and conditions; or
(2) Obtain a Bid or bids from qualified bidders for submission to the Employer for
completing the Contract in accordance with its terms and conditions, and upon
determination by the Employer and the Surety of the lowest responsive Bidder,
arrange for a Contract between such Bidder and Employer and make available as
work progresses (even though there should be a default or a succession of defaults
under the Contract or Contracts of completion arranged under this paragraph)
sufficient funds to pay the cost of completion less the balance of the Contract Price;
but not exceeding, including other costs and damages for which the Surety may be
liable hereunder, the amount set forth in the first paragraph hereof. The term
“Balance of the Contract Price,” as used in this paragraph, shall mean the total
amount payable by the Employer to the Contractor under the Contract, less the
amount properly paid by the Employer to the Contractor; or
(3) Pay the Employer the amount required by the Employer to complete the Contract in
accordance with its terms and conditions up to a total not exceeding the amount of
this Bond.
The Surety shall not be liable for a greater sum than the specified penalty of this Bond.

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Part 3. Section 9. Contract Forms

Any suit under this Bond must be instituted before the expiration of one year from the date of
issuance of the Certificate of Completion.
No right of action shall accrue on this Bond to or for the use of any person or corporation other
than the Employer named herein or the heirs, executors, administrators, successors, and assigns
of the Employer.
In testimony whereof, the Contractor has hereunto set its hand and affixed its seal, and the
Surety has caused these presents to be sealed with its corporate seal duly attested by the
signature of its legal representative, this [day] day of [month], [year].

Signed by
on behalf of [name of Contractor] in the capacity of
In the presence of
Date

Signed by
on behalf of [name of Contractor] in the capacity of
In the presence of
Date

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Part 3. Section 9. Contract Forms

Note for Bidders: The Advance Payment Security should be on the letterhead of the issuing Financial In-
stitution and should be signed by a person with the proper authority to sign documents that are binding
on the Financial Institution.

Advance Payment Security

Bank Guarantee for Advance Payment

To: [name and address of Employer]

[Name of Contract]
Gentlemen:

In accordance with the provisions of the Conditions of Contract, Clause 51 (“Advance

Payment”) of the above-mentioned Contract [name and address of Contractor] (hereinafter
called “the Contractor”) shall deposit with [name of Employer] a Bank Guarantee to guarantee
his proper and faithful performance under the said Clause of the Contract in an amount of
[amount of Guarantee] [amount in words].

We, the [Bank or Financial Institution], as instructed by the Contractor, agree unconditionally
and irrevocably to guarantee as primary obligator and not as Surety merely, the payment to
[name of Employer] on his first demand without whatsoever right of objection on our part and
without his first claim to the Contractor, in the amount not exceeding [amount of Guarantee]
[amount in words].

We further agree that no change or addition to or other modification of the terms of the Contract
or of Works to be performed thereunder or of any of the Contract documents which may be
made between [name of Employer] and the Contractor, shall in any way release us from any
liability under this Guarantee, and we hereby waive notice of any such change, addition, or
modification.

This Guarantee shall remain valid and in full effect from the date of the advance payment under
the Contract until [name of Employer] receives full repayment of the same amount from the
Contractor.

This Guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No.
458.
Yours truly,

Signature and seal:

Name of Bank/Financial Institution:

Address:
Date:

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