Common use of Refundment Guarantee Clause in Contracts

Refundment Guarantee. As a condition precedent to the payment of the first instalment and as a security for refund of instalments paid prior to delivery of the VESSEL, the BUILDER shall provide the BUYER before the receipt by the BUILDER of the first instalment with a Refundment Guarantee issued in the form as per Annex A and furnished by the bank nominated by the BUILDER and accepted by the BUYER prior to signing this Contract, in favour of the BUYER. If the BUILDER is required to provide a substitute Refundment Guarantee as stipulated in Sub-clause (3) of Clause 5 of Article XI, the BUYER is entitled to withhold the instalment which become due during this period until the BUILDER provide the substitute Refundment Guarantee. All the expenses in issuing and maintaining the letter of guarantee described in this Paragraph shall be borne by the BUILDER.