Parent company guarantee (outsourcing)

by Practical Law Commercial

A standard document for a parent company guarantee (PCG) to be used in an outsourcing transaction governed by English law. This standard document is for where a supplier's parent company guarantees the supplier's financial and performance obligations under the main outsourcing agreement for the benefit of a customer. It is drafted as a deed to ensure enforceability and includes both a guarantee and a separate, primary obligation indemnity. This PCG is designed to mitigate customer risk in complex, high-value, or business-critical outsourcing projects. It contains key provisions to protect the customer, such as clauses ensuring the guarantee is a continuing security and preserving the guarantor's liability against events that might otherwise discharge it, including variations to the underlying agreement .