PERFORMANCE BONDS AND GUARANTEES: CONSTRUCTION OWNERS AND PROFESSIONALS BEWARE
Performance bonds and guarantees have been the subject of considerable litigation in recent years in not only the United Kingdom but also some other common law jurisdictions. The aim of this research is to identify the issues most commonly in dispute and the legal principles governing their resolution. Possession of knowledge of the issues and principle should alert the construction and engineering industries and their legal advisers to the matters that need serious attention in the drafting and negotiation of these instruments. Clarity in the legal principles should also contribute to a reduction in litigation. The issues identified include whether an instrument is a conditional or an on-demand bond, the effect of failure on the part of the beneficiary to give notices, availability of an injunction to restrain the surety from paying after a call has been made by the beneficiary, availability of an injunction to restrain a beneficiary from receiving payment after a demand has been made, availability of an injunction to restrain a beneficiary from making claim, availability of a Mareva injunction to freeze the fruits of a call, meanings of certain phrases used in the instruments, and a duty to account for proceeds of a call. The principles governing their resolution were also identified. Particular attention must be paid to any ambiguity whether a surety is liable is always construed in the surety's favor, and prejudicial conduct by the beneficiary releases the surety unless the instrument provides expressly to the contrary.
Law of Guarantees
Definitions and characteristics. Contractual requirements. Formal requirements. Construction. Vitiating elements in the contract. The liability of the surety. Enforcement of contracts of suretyship. Revocation of contracts of suretyship. Discharge of the surety. Rights of the surety against the principal. Rights of the surety against the creditor. Rights of the surety against co-sureties. Insolvency. Bank guarantees and related transactions. International commerce. Performance bonds. Consumer credit transactions. Landlord and tenant. Precedents. Appendix legislation.
Decidability of some intuitionistic predicate theories
Suppose T is a first order intuitionistic theory (more precisely, a theory of Heyting's predicate calculus, e.g., abelian groups, one unary function, dense linear order, etc.) presented to us by a set of axioms (denoted also by) T. Question. Is T decidable? One knows that if the classical counterpart of T (i.e., take the same axioms but with the classical predicate calculus as the underlying logic) is not decidable, then T cannot be decidable. The problem remains for theories whose classical counterpart is decidable. In [8], sufficient conditions for undecidability were given, and several intuitionistic theories such as abelian groups and unary functions (both with decidable equality) were shown to be undecidable. In this note we show decidability results (see Theorems 1 and 2 below), and compare these results with the undecidability results previously obtained. The method we use is the reduction-method, described fully in [12] and widely applied in [3], which is applied here roughly as follows: Let T be a given theory of Heyting's predicate calculus. We know that Heyting's predicate calculus is complete for the Kripke-model type of semantics. We choose a class M of Kripke models for which T is complete, i.e., all axioms of T are valid in any model of the class and whenever φ is not a theorem of T, φ is false in some model of M.