Court rules that management corporation may sue developer for latent defects in common property internationallawoffice.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from internationallawoffice.com Daily Mail and Mail on Sunday newspapers.
Introduction
Providing a performance bond in the form of a bank guarantee to secure the performance of work is not unusual in the construction industry. In the event that a contractor breaches its contractual obligations (eg, fails to complete its work by the completion date), the employer or developer is entitled to call on the bank guarantee. However, the contractor may bring an action in court against this call on the ground that such a demand is unconscionable. With the recent enforcement of the Temporary Measures for Reducing the Impact of Coronavirus Disease (COVID-19) Act 2020 (COVID-19 Act) – the application of which has been extended to 31 March 2021 – a question has arisen as to whether the COVID-19 Act provides a new ground for contractors to challenge calls on bank guarantees. While the high court s decision in