The restraints of performance bond claims in construction industry

TL;DRAbstract

Construction industry is full of uncertainties. It is a risky enterprise. Due to the recent problems of the construction industry, various bonds are required. Performance bond is used to guarantee performance of contract and protect the owner from financial loss due to the failure of the contractor to perform. It has held as a comprehensive and reliable instrument for minimizing the risks in construction projects. However there are some issues that may obstruct the real purpose of performance bond and restrained the performance bond claim. In Teknik Cekap Sdn Bhd v Public Bank Bhd, defective notice in calling performance bond had obstructed the real purpose of performance bond. Besides, in Edward Owen Engineering Ltd v Barclays Bank International Ltd and another, it stated that if there is clear fraud, the surety does not have to pay according to its guarantee. In Min Thai Holdings Pte Ltd v Sunlabel Pte Ltd & Anor, it also stated that unconscionability is another restraint of performa

Chat with Paper

AI Agents for this Paper