Getting to know how to use guarantees is critical for any business that is planning to work with the public sector, especially on construction projects. The risks – all the more when working overseas – are always high. Many projects are affected by unforeseen events, from weather to the failure of a supplier or delays in delivery of essential materials.
The purpose of a guarantee is to reduce the uncertainty and bring security to the financial aspects of the contract so that all parties can be on good terms and the project is completed. In many public sector contracts a bid, payment and performance guarantee may be required by law.
A Bid Guarantee protects your customers against the non-execution of your contractual obligations. A Payment Guarantee protects your subcontractors and material suppliers against payment default. And a Performance Guarantee protects your customers against damages resulting from nonconformity of the work.
We have worldwide experience of working with guarantees in construction, manufacturing and other sectors where public sector contractors are placed. With our understanding of the dynamics of trade and the fine detail of guarantee management across the world, we take those simple principles and build agreements that are tailored for your needs.