Contact

Performance guarantees in construction contracts

Back to top

Performance guarantees in construction contracts

Guarantees are common in construction and engineering contracts. In particular, the employer may require that the contractor provide a performance guarantee.

16 May 2024 11:26 Minutes Podcast
Performance guarantees in construction contracts

Performance guarantees in construction contracts

Podcast

Performance guarantees in construction contracts

Podcast

00:00 00:00
Download MP3

Guarantees are common in construction and engineering contracts. In particular, the employer may require that the contractor provide a performance guarantee. This type of guarantee is designed to secure the contractor's performance of its obligations under the contract. The reason for this mechanism is that if the contractor fails to perform, the employer is likely to suffer a loss. Performance guarantees are a means by which the employer is afforded protection against non-performance by the contractor and for this reason, they are often referred to as "performance security".

Listen to Construction & Engineering Sector Head and Director, Clive Rumsey and Candidate Attorney, Iva Babayi as they discuss performance guarantees in construction contracts.

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2024 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.

You might also be interested in

23 Oct 2024

by Alecia Pienaar

NERSA’s decision on Eskom’s curtailment application pending

In terms of a consultation paper released by the National Energy Regulator of South Africa (NERSA) on 5 July 2024 (Consultation Paper), Eskom submitted an application to NERSA on 24 May 2024 requesting approval for congestion curtailment to be treated as a constrained generation ancillary service for renewable energy resources (Application). Per the Consultation Paper, “ leveraging the intermittent nature of renewable energy resources, it becomes possible to connect more resources to the grid without exceeding the capacity of the grid for most of the time ”.

Projects & Energy

5 min read

18 Sep 2024

by Vivien Chaplin and Haafizah Khota

Industry update: Change in air service licensing process

In a significant shift for South Africa’s aviation sector, the Minister of Transport has announced a crucial change regarding the processing of Foreign Operator Permit applications and Air Service Licence applications.

2 min read

8 May 2024

by Lucinde Rhoodie and Dipuo Titipana

The ball is in our courts: How section 20(9) of the Companies Act empowers courts to unmask corporate identity

One of the cornerstones of South Africa’s corporate law is the separate legal existence of companies, which provides, generally, protection to its directors and shareholders against personal liability for a company’s debts and also makes a distinction between companies forming part of the same group of companies. However, sometimes, through the unlawful actions of shareholders and directors, it is necessary for our courts to look behind the separate legal entity companies in a group and treat such group companies as one legal entity.

Corporate Debt, Turnaround & Restructuring

5 min read

2 Jul 2024

by Stella Situma

Increase in interest rates: A delicate balance between contractual freedom and consumer protection

That parties have contractual freedom is not in doubt. To this end, courts have upheld the sanctity of contracts entered into by parties, except in cases where the parties contracted outside statute or where holding parties to their bargain would be unconscionable or result in unjust enrichment to one party at the expense of theother. 

Banking, Finance & Projects

5 min read

28 May 2024

by Alex de Wet

Legalities around landlords tenants and rental agreements medium

Alex de Wet, Director in Real Estate joined Simon Brown at Moneyweb where he discussed Legalities around landlords, tenants, and rental agreements.

Real Estate Law

06:36 Minutes

18 Sep 2024

by Tayyibah Suliman and Sadia Rizvi

Summary of the POPIA case of Munetsi v Madhuyu and Another

The Western Cape High Court recently handed down a judgment that applied certain provisions of the Protection of Personal Information Act 4 of 2013 (POPIA). Mr Munetsi (the applicant), applied to the court seeking relief (a public apology) in light of Mr Madhuyu and another’s (respondents) publication on social media platforms of the applicant’s personal information which he alleged to be defamatory. The respondents published the applicant’s mobile number on Facebook, together with a video. The video prompted the respondents’ followers to contact the applicant, and thus resulted in a large volume of phone calls made to his number. The applicant claimed that such publication breached POPIA’s provisions (without any reference to a particular clause), as well as his right to privacy. 

Technology & Communications

3 min read

This website uses cookies to enhance the browsing experience. For more information, please see our Cookie Policy.

Accept Decline