New Clots in the Life-Blood of International Construction Projects: Enjoining Employers' Calls on Performance Bonds

Lauren Adams

May 2014

A paper based on the first prize entry in the Hudson Prize essay competition 2013, presented to a meeting of the Society of Construction Law in London on 13th May 2014

Lauren Adams looks at the value of performance bonds to the construction industry and the protection historically given to them by the courts. The paper considers recent developments in Simon Carves and Doosan and argues that the courts have shown a greater willingness to investigate the merits of a call on a bond to prevent the harsh effects of an improper call on contractors. It is argued that these cases have not struck the right balance of interests between employers and contractors: the proper solution to the inherent tension in performance bonds is to be found at the pre-contractual stage.

Introduction - Bonds in the construction industry - The unique value of an on demand bond - The courts' approach to on demand bonds pre Simon Carves - The development in Simon Carves - The development in Doosan - The problem - Other attempted solutions - The solution: confidentiality/notification - Conclusion.

The author: Lauren Adams is a pupil barrister at Atkin Chambers, Gray's Inn, London.

Text 13 pages.