Advance payment guarantees are crucial in contracts for works or services, whether in the public or private sector. They ensure the repayment of advance payments made by the project owner to the contractor in case the work is not performed.

When a contract is signed and an advance payment is made to start the work, the contractor must provide an advance payment guarantee to ensure that these funds will be reimbursed if the project is abandoned or the work is not carried out as agreed.

This guarantee is particularly important in public projects, where public authorities aim to secure allocated funds and ensure that projects are completed in accordance with contractual commitments. Similarly, some grants or government aid may be conditioned on the presentation of advance payment guarantees, demonstrating the beneficiary’s commitment to fulfilling their contractual obligations.