How to negotiate a Performance Bond: 5 tips

By Elisabetta Ventrella on 17 Jul 2017

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.

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On-Demand Bond: how it works

By Giuseppe Broccoli on 10 Jul 2017

 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. 

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How to negotiate an Advance Payment Bond

By Giuseppe Broccoli on 3 Jul 2017

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?

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How to reduce construction disputes

By Giuseppe Broccoli on 1 Jul 2017

In construction contracts, disputes are extremely  frequent  especially in international projects. The claiming is almost inevitable and controversies concerning extra works,  extension  of time, liquidated damages for (alleged or actual) delay of the Contractor, or for the calling of the bonds issued by the Contractor for (alleged or actual) default from the Contractor itself are almost the ordinary course of a project.

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Bid Bond: how to negotiate it

By Elisabetta Ventrella on 29 Jun 2017

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.

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How to negotiate a Warranty Bond

By Elisabetta Ventrella on 26 Jun 2017

The Warranty Bond is a guarantee which secures the Employer in the case the Contractor will not remedy the defects, if any, which may occur during the warranty period of the works. 

It is often issued by an insurance company or (especially in mid size international projects) by a bank and it provides the payment of a sum of money if the Contractor will not perform any remedial work as provided in the contract, a sum which will be used by the Employer to have the remedial works carried out by a third party.

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