2022-04-27（224）Engineering law a

CONTRACT AGREEMENT

9. The Contractor shall when called upon so to do enter into and execute a Contract Agreement (to be prepared at the cost of the Employer) in the form annexed.

See p. 22.

SURETIES

10. If the Tender shall contain an undertaking by the Contractor to provide when required 2 good and sufficient sureties or to obtain the guarantee of an Insurance Company or Bank1 to be jointly and severally bound2 with the Contractor in a sum not exceeding 10 percent of the Tender Total3 for the due performance of the Contract under the terms of a Bond the said sureties Insurance

Company or Bank and the terms of the said Bond shall be such as shall be approved by the Employer4 and the provision of such sureties or the obtaining of such guarantee and the cost of the Bond to be so entered into shall be at the expense in all respects of the Contractor unless the Contract otherwise provides.

1. BOND. Where the contractor is a limited company the directors may also be asked to guarantee the contract personally, and in some cases an employer should be asked to provide a bond for payment.

Failure by the contractor to obtain a bond is generally sufficiently serious to entitle the employer to bring the whole contract to an end (ch. 16). For the engineer’s duty to ensure that a bond is supplied at the outset, see p. 378. qq

For the January 1979 revision to this clause see p. 322, N. 6.

2. “JOINTLY AND SEVERALLY BOUND”. See p. 321, N. 2.

3.“10 PER CENT OF THE TENDER TOTAL”. Definition cl. 1 (1) (h). If there are large increases in the works the employer may have to consider getting a further bond at his own cost.

4. “APPROVED BY THE EMPLOYER”. The bond must be inspected by the engineer and any doubtful points brought to the employer’s attention, for legal advice if necessary.

See recommended form, p. 320. The form is not referred to in this clause, but by the Form of Tender the contractor undertakes to provide a bond in the form “annexed to the Conditions of Contract”. It is important for the form actually to be included or incorporated (p. 25, N. 8) in the tender documents.

5. SUB-CONTRACT BONDS. See p. 321.