Document background
The Bank Guarantee For Purchase Of Goods is a crucial document in Saudi Arabian commercial transactions, particularly in international trade. It provides security to sellers when dealing with unknown buyers or in high-value transactions. The guarantee is issued by a Saudi bank or a foreign bank's Saudi branch, ensuring compliance with both SAMA regulations and Islamic Shariah principles. This document is typically used when a buyer needs to provide payment security to a seller, especially in international trade where parties may not have established business relationships. The guarantee amount usually represents a percentage of the purchase price and remains valid until the underlying transaction is completed. The document includes specific conditions for demand, payment mechanisms, and dispute resolution, all within Saudi Arabia's legal framework.
