Parties to a construction contract usually agree to the obligation to conclude separate financial arrangements with third parties for the purposes of ensuring financial security and project success.
Parties to a construction contract usually agree to the obligation to conclude separate financial arrangements with third parties for the purposes of ensuring financial security and project success. One such arrangement is a retention guarantee. Although not as popular as the other form of guarantees (i.e., Advance Payment and Performance Guarantees) in the South African construction industry, this arrangement offers protection to the Employer through providing financial security for the correction of defects that may manifest and which the Contractor fails to remedy.
Join Khaya Mantengu and Zodwa Malinga in the Construction & Engineering sector where they discuss the purpose of retention guarantees, the parties to such arrangement and what the parties should consider when agreeing to such guarantees.
