Retention guarantee

Trade finance - major project contracting.

Retention guarantees are a type of performance guarantee, used as an alternative to retention monies.

When using a retention guarantee, the client agrees to pay the amounts which would otherwise have been held as retention, and instead a guarantee is provided to secure the amount that would have been retained.

The value of the guarantee will usually reduce after completion has been certified.

Also known as a retention money guarantee, or a retention bond.

See also

• Bond
• Contract
• Guarantee
• Performance guarantee
• Retention
• Retention of title
• Retention ratio
• Security
• Trade finance