Common use of SECURITY OR BANK GUARANTEES Clause in Contracts

SECURITY OR BANK GUARANTEES. The Contractor may at any time lodge with the Principal an unconditional Bank Guarantee or an undertaking (“the Security”) from an approved financial institution or insurance company for an amount equivalent to the limit of Retention Monies specified in clause 29.3.1, whereupon no deductions for Retention Monies will be made from Progress Payments. The Principal may convert the Security into money where the Principal becomes entitled to exercise a right under the Contract to deduct any sum from the Security but must first, by written notice, advise the Contractor of the intended action providing at least five (5) days for the Contractor to respond. The Principal shall not be liable for any loss occasioned by such conversion. Subject to the Contract, when a Certificate of Practical Completion is issued, the required value of the Security will be deemed to be reduced by one half of its stated amount. Subject to the Contract, the Security shall be released to the Contractor within twenty-eight (28) days of the Final Certificate. As soon as, in the opinion of the Superintendent, the Works (or, if item 11 of Appendix A permits the Works to be completed in Stages, a Stage of the Works) have reached Practical Completion, the Superintendent will issue a Certificate of Practical Completion for the Works or the applicable Stage (as the case requires) to the Contractor and the Defects Liability Period stated in item 8 of Appendix A for the Works or the applicable Stage (as the case requires) shall be calculated from the Date of Completion. The Superintendent shall provide to the Contractor, either together with a Certificate of Practical Completion issued under clause 32.1 or as soon as practical thereafter, a list of any minor omissions and minor defects in the Works or the applicable Stage (as the case requires) (which have not prevented Practical Completion from occurring) and the Contractor shall promptly within ten (10) days of receipt of this list rectify the notified defects and omissions to the satisfaction of the Superintendent. From the date a Certificate of Practical Completion is issued under clause 32.1 the Works or the applicable Stage (as the case requires) the subject of that Certificate of Practical Completion shall be at the risk of the Principal. If item 11 of Appendix A permits the Works to be completed in Stages, the Principal may occupy or use each Stage after a Certificate of Practical Completion has been issued under clause 32.1 for that Stage even though the whole of the Works have not reached Practical Completion, and such occupation or use shall not limit or affect the obligations of the parties under the Contract, including the obligation of the Contractor to achieve completion of the Works by the Date of Completion. If the Principal does so, the Principal must allow the Contractor reasonable access to that Stage to enable the Contractor to bring the whole of the Works to Practical Completion and to undertake those further Works necessary to rectify any minor omissions and minor defects in the Works or the applicable Stage under clause 32.2. The Contractor shall obtain and ensure that the Principal will have the benefit of all warranties specified in the Contract or which in the opinion of the Superintendent are essential for the use, operation or maintenance of the Works.

SECURITY OR BANK GUARANTEES. The Contractor may at any time lodge with the Principal an unconditional Bank Guarantee or an undertaking (“the Security”) from an approved financial institution or insurance company for an amount equivalent to the limit of Retention Monies specified in clause 29.3.1, whereupon no deductions for Retention Monies will be made from Progress Payments. The Principal may convert the Security into money where the Principal becomes entitled to exercise a right under the Contract to deduct any sum from the Security but must first, by written notice, advise the Contractor of the intended action providing at least five (5) days for the Contractor to respond. The Principal shall not be liable for any loss occasioned by such conversion. Subject to the Contract, when a Certificate of Practical Completion is issued, and all defects identified at Practical Completion have been remedied, whichever is the required value of later, the Principal’s entitled to Security will be deemed to shall be reduced by to one half of its stated amount. Subject to the Contract, the Security shall be released to the Contractor within twenty-eight (28) days of the Final Certificate. As soon as, in the opinion of the Superintendent, the Works (or, if item 11 of Appendix A permits the Works to be completed in Stages, a Stage of the Works) have reached Practical Completion, the Superintendent will issue a Certificate of Practical Completion for the Works or the applicable Stage (as the case requires) to the Contractor and the Defects Liability Period stated in item 8 of Appendix A for the Works or the applicable Stage (as the case requires) shall be calculated from the Date of Completion. The Superintendent shall provide to the Contractor, either together with a Certificate of Practical Completion issued under clause 32.1 32.1. or as soon as practical thereafter, a list of any minor omissions and minor defects in the Works or the applicable Stage (as the case requires) (which have not prevented Practical Completion from occurring) and the Contractor shall promptly within ten (10) days of receipt of this list rectify the notified defects and omissions to the satisfaction of the Superintendent. From the date a Certificate of Practical Completion is issued under clause 32.1 32.1. the Works or the applicable Stage (as the case requires) the subject of that Certificate of Practical Completion shall be at the risk of the Principal. If item 11 of Appendix A permits the Works to be completed in Stages, the Principal may occupy or use each Stage after a Certificate of Practical Completion has been issued under clause 32.1 32.1. for that Stage even though the whole of the Works have not reached Practical Completion, and such occupation or use shall not limit or affect the obligations of the parties under the Contract, including the obligation of the Contractor to achieve completion of the Works by the Date of Completion. If the Principal does so, the Principal must allow the Contractor reasonable access to that Stage to enable the Contractor to bring the whole of the Works to Practical Completion and to undertake those further Works necessary to rectify any minor omissions and minor defects in the Works or the applicable Stage under clause 32.2. .. The Contractor shall obtain and ensure that the Principal will have the benefit of all warranties specified in the Contract or which in the opinion of the Superintendent are essential for the use, operation or maintenance of the Works.