Monthly Archives: September 2012

BID (TENDER) BONDS This is a debt secured by a bidder for a construction project or other large ‘project’ on a tender based selection process for providing a guarantee to the potential client that the bidder will take on the contract if selected. If they decline to accept the contract the bond is forfeited, unless […]

Conditional bond A conditional bond is common within the UK construction industry. Such a bond is usually issued by an insurance company, and payment is usually conditional upon the employer who makes the call providing the amount of loss which he has suffered. In practice, therefore, a conditional bond may require litigation before any payment […]

On-Demand Bond An on-demand bond is also referred to as an Unconditional Bond. Contractor’s performance bonds come in two basic varieties to meet the needs of different project owners. An on-demand bond results in an automatic cash payment if the contractor fails to complete the project. With a conditional performance bond the burden of proof […]

The complex world of Bonds – a business briefing. The word ‘Bond’ is regularly used in procurement, often with regard to construction projects or capital equipment procurement. In order to apply, and include Bonds effectively in contracts, requires specialist knowledge, particularly, but not exclusively, by procurement. We are dedicating this whole week of Risk briefing […]

Empty Vessels The problem of inaccurate drafting of contracts is a recurring theme in court cases. In the case of Wuhan Guoyu Logistics Group Co Ltd and Yangzhou Guoya Shipbuilding Co Ltd v Emporiki Bank of Greece SA [2012] EWCH 1715 (Comm) there is another instance of inaccuracy. The contract was for the construction of […]

A refresher on Performance Bonds. A requirement of a performance bond is not an uncommon occurrence on large projects and construction projects. Procurement specialists are usually presented with wording for the bond and often the bond is put in place without any discussion on negotiation. Keating Chambers (Barristers) offer this thought. ‘The word “bond” conjures […]