Construction Law/Performance Bond

Advertisement


Question
Hi, we have a contract under FIDIC Short Form. The Performance Bond of the contractor expired since September 2012 and they have not supplied a renewed bond despite our reminders.  We have now held them in breach of contract as a result and they are now stating that they will claim costs for the performance bond given that the project has been delayed. The Contractor has suspended works numerous times (for late payment of additional security).  Even after payment the contractor failed to go back on site. How valid would such a claim be for costs of the performance bond?

Thanks much

Answer
Dear Dils,
Thank you for your question
As i could understand from your question,you have mentioned delays in payments and as a consequence contractor suspended the work several times and also on his part delayed validation of per. bond .Here it appears that delayed payments to the contractor are the main culprit and such frequent suspensions must have caused him tremendous.In principle,the contractor need to compensated for prolongations costs if the project has not been completed for employer's reasons
but you have to see what the contract says on this account and secondly followed procedure as laid down in clause 10.
Regards-liaqat hayat

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Liaqat Hayat

Expertise

I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

©2016 About.com. All rights reserved.