BdaLaw is honored to have contributed to the 12th edition of Construction, a volume in the Getting the Deal Through series of annual reports which provides international analysis in key areas of law and policy for corporate counsel, crossborder legal practitioners and business people.
The Performance Bond is a guarantee which secures the Employer from the risk of possible breaches by the Contractor during the execution of the works. It can be risky for the Contractor for several reasons and above all because it is a guarantee which remains in force for the entire life of the construction project.
One of the most frequent problems in international construction projects (and more generally in international commerce) is represented by the issue of bonds or guarantees that the Employer requests to secure the performance of the contract. The purpose of said bonds is to guarantee the Employer that he will recover any loss or damage that it might suffer as a consequence of the breach of the Contractor.
In international construction projects, it is rather standard that the Contractor starts the mobilisation/procurement just after an advance payment has been paid by the Employer. But how does it work and how can you negotiate it at your best?
In construction contracts, disputes are extremely
The Bid Bond guarantees the Employer that the bidder will sign the contract, if awarded, or will comply with other specified obligations (such as to issue other bonds as provided in the bidding documentation). They are rather frequent, especially in mid/big size projects.