This post considers whether a performance bond:
- Is triggered by the insolvency of the principal contractor.
- Will respond if the principal contractor becomes insolvent.
If you are still misunderstanding the implications of the decision in Perar BV v General Surety & Guarantee Co Ltd then you are not alone. Many well regarded law firms also misunderstand it. There is a misconception that it means that an employer (beneficiary) cannot bring a claim under a performance bond based on the contractor’s insolvency or that the bond is not triggered by and payable following the insolvency of the contractor. Continue reading
