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Book Titles No access

Demand guarantees in the construction industry

A comparative legal study of their use and abuse from a South African, English and German perspective
Authors:
Publisher:
 25.09.2018

Summary

Independent guarantees, payable on demand (so-called demand guarantees) are the preferred security instruments in complex construction and infrastructure projects. To the beneficiary, demand guarantees offer immediate access to cash without having to prove breach of contract, (insufficient) performance, damages, or the extent thereof. Due to the independent nature of demand guarantees, there is a risk of abusive or fraudulent calls. This comparative study analyses, in depth, the use of such guarantees in the construction industry, and the legal situation in South African, English, and German law regarding abusive calls on demand guarantees. The book explores typical scenarios in construction, and illustrates measures to prevent or mitigate abusive calls. The book speaks to practitioners working in construction or the financing of construction (such as construction professionals, bankers, attorneys), and to academics and students who have an interest in advanced studies of construction and construction law, demand guarantees, and finance.



Bibliographic data

Copyright year
2018
Publication date
25.09.2018
ISBN-Print
978-3-8487-5113-6
ISBN-Online
978-3-8452-9315-8
Publisher
Nomos, Baden-Baden
Series
Studien zum Handels-, Arbeits- und Wirtschaftsrecht
Volume
173
Language
English
Pages
356
Product type
Book Titles

Table of contents

ChapterPages
  1. Titelei/Inhaltsverzeichnis No access Pages 1 - 12
    1. 1.1 Introduction No access
    2. 1.2 Motivation and intention No access
    3. 1.3 Jurisdictions No access
    4. 1.4 Research methodology No access
    5. 1.5 Research scope and structure No access
    1. 2.1 General introductory remarks No access
    2. 2.2 Parties and terminology No access
    3. 2.3 Privity of contract No access
    4. 2.4 Contracting and procurement in the construction environment No access
    5. 2.5 Tendering No access
      1. 2.6.1 Introduction No access
        1. 2.6.2.1 JCT No access
        2. 2.6.2.2 NEC 3 No access
      2. 2.6.3 Germany: VOB No access
        1. 2.6.4.1 JBCC No access
        2. 2.6.4.2 GCC No access
      3. 2.6.5. International construction contracts: FIDIC No access
    6. 2.7 General concluding remarks and analysis No access
    1. 3.1 Introduction: the need for security No access
      1. 3.2.1 Uniform Rules for Demand Guarantees (URDG) No access
      2. 3.2.2 International Standby Practices (ISP98) No access
      3. 3.2.3 UNCITRAL Convention No access
      4. 3.2.4 Concluding remarks No access
    2. 3.3 Definition, terminology, parties, establishment and discharge of demand guarantees in their most simple form No access
      1. 3.4.1 Introduction No access
        1. 3.4.2.1 Introduction No access
        2. 3.4.2.2 Case law and commentary No access
        3. 3.4.2.3 Legal frameworks No access
        4. 3.4.2.4 Pay first, argue later No access
        5. 3.4.2.5 Exceptions to the independence principle No access
        6. 3.4.2.6 Restraining a call on the guarantee: procedural aspects and injunctions No access
        7. 3.4.2.7 Conclusions No access
        1. 3.4.3.1 Introduction No access
        2. 3.4.3.2 Relevance and applicability of the doctrine of documentary compliance No access
        3. 3.4.3.3 Non-documentary conditions No access
    3. 3.5 General concluding remarks and analysis No access
    1. 4.1 Introduction No access
    2. 4.2 Standard-form contracts and guarantees No access
      1. 4.3.1 Performance guarantee No access
      2. 4.3.2 Payment guarantee No access
      3. 4.3.3 Maintenance or warranty guarantee No access
      4. 4.3.4 Tender or bid guarantee No access
      5. 4.3.5 Repayment or cash advance guarantee No access
      6. 4.3.6 Retention money guarantee No access
    3. 4.4 Utilisation of demand guarantees: critical assessment No access
      1. 4.5.1 Introduction No access
      2. 4.5.2 Accessory guarantee (suretyship and “Bürgschaft”) No access
      3. 4.5.3 Indemnity No access
      4. 4.5.4 Mortgage No access
      5. 4.5.5 Cash deposit, escrow account and retention money No access
      6. 4.5.6 Insurance No access
      7. 4.5.7 Liquidated damages No access
    4. 4.6 General concluding remarks and analysis No access
    1. 5.1 Introduction No access
      1. 5.2.1 Fraud in the “narrow sense” in English law No access
      2. 5.2.2 Fraud in the “wide sense” in English law No access
      3. 5.2.3 Fraud as “no honest belief” in English law No access
      4. 5.2.4 Fraud in South African law No access
      5. 5.2.5 Fraud as “knowledge of lack of entitlement” in South African law No access
      6. 5.2.6 The fraud exception and demand guarantees: applicability and suitability No access
      7. 5.2.7 Summary: fraud in English and South African law of demand guarantees No access
      8. 5.2.8 Excursus: fraud in the context of retention money guarantees No access
      9. 5.2.9 The German approach: doctrine of Rechtsmissbrauch (abuse of rights) No access
      10. 5.2.10 The fraud exception: concluding remarks and analysis No access
      1. 5.3.1 Introduction No access
      2. 5.3.2 Arbitration and the Dormell case No access
      3. 5.3.3 Certification in the construction industry and the Brera and Coface cases No access
      4. 5.3.4 Perspectives from Germany and England No access
      5. 5.3.5 Summary and conclusion No access
      1. 5.4.1 Introduction No access
      2. 5.4.2 English law No access
      3. 5.4.3 South African law No access
      4. 5.4.4 German law No access
    2. 5.5 Prescription of underlying claim (or impact of statute of limitation) No access
      1. 5.6.1 Introduction No access
      2. 5.6.2 South African law No access
      3. 5.6.3 English law No access
      4. 5.6.4 German law No access
      5. 5.6.5 Conclusion No access
    3. 5.7 Gross disproportionality between actual damages suffered and the amount demanded under the guarantee No access
    4. 5.8 Doctrine of merger (confusio) No access
    5. 5.9 Extend or pay problem No access
    6. 5.10 Conclusion No access
    1. 6.1 Introduction No access
      1. 6.2.1 Introduction No access
      2. 6.2.2 Documentary non-compliance: right to reject demand for payment No access
      3. 6.2.3 Documentary compliance under English law No access
      4. 6.2.4 Documentary compliance under German law No access
      5. 6.2.5 Documentary compliance under South African law No access
      6. 6.2.6 Documentary compliance and abusive demands: concluding remarks No access
      1. 6.3.1 Introduction No access
      2. 6.3.2 The beneficiary: agency and representation No access
      3. 6.3.3 The beneficiary: legal succession and the rights under the demand guarantee No access
        1. 6.3.4.1 Discrepancies: beneficiary and employer No access
        2. 6.3.4.2 Discrepancies: applicant and original debtor No access
      4. 6.3.5 Identity of the parties: concluding remarks No access
    2. 6.4 Return of the original guarantee, partial and multiple demands No access
    3. 6.5 Defences based on the terms of the guarantee: variable construction guarantees and retention money guarantees No access
    4. 6.6 Conclusion No access
    1. 7.1 Introduction No access
    2. 7.2 South African law No access
    3. 7.3 English law No access
    4. 7.4 German law: the concept of “Nebenpflicht”, negative stipulations and independent construction guarantees No access
    5. 7.5 Analysis and comparative remarks regarding negative stipulations No access
    6. 7.6 Conclusion No access
    1. 8.1 Introduction No access
    2. 8.2 Contract management and conciliation No access
    3. 8.3 Specific clauses: drafting of the underlying contract and bespoke guarantees No access
    4. 8.4 Standard-form guarantees No access
    5. 8.5 Provisional court measures No access
    6. 8.6 Concluding remarks No access
  2. Bibliography No access Pages 323 - 356

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