TERMINATION AND PERFORMANCE BONDS

Termination and Performance Bonds

Termination and Performance Bonds

1. From what you know about the Project, does the Authority have cause sufficient to terminate its contract with D&E under § 15.2 of the General Conditions?

Ans. Under the construction contract legislation in the New York State applying the conditions as per the case of D&E under § 15.2 such projects should be contracted under the cost-plus contract is more appropriate. In a cost-plus contract, the contract price is the costs incurred by the contractor plus a fee for the contractor's services and profit margin.

2.Review Peru Associates. Assume that the Authority's…?

Ans. Although it is difficult to obtain a new trial solely on the grounds of improper closing argument, where attorneys repeatedly engage in such argument in an effort to appeal to the jury's sympathy, if that argument has no foundation in the facts, a new trial is warranted. In Peru Associates, Inc. v. State, 70 Misc.2d 775, 334 N.Y.S.2d 772 (Ct. of Claims 1971)), the appellate court reversed a judgment in the plaintiff's favor, in a case where the defendants admitted liability. The plaintiff's counsel argued that the case was about “corporate greed.

3.Assume that neither the Surety nor D&E contest the Authority's termination of the contract.

a)What are the possible avenues by which the surety can avoid satisfying the performance bond?

Ans. The terminology in the locality of presentation assurances is difficult and confusing. The period “bond”, in the very wide sense, means a binding agreement. The significance of pointing out this disarray is that the genuine instruments needed or recounted must be analyzed to determine the factual environment of the instruments, since privileges and obligations affiliated with surety bonds are distinct from those of standby notes of credit. (Brown 2008)

b)What are the consequences for the surety of refusing to perform on the bond without good cause?

Ans. The response to these inquiries lies inside the termination for convenience provision which has become progressively widespread in private construction agreements. The termination for convenience provision is one of the most exclusive provisions in building contracts. It permits an proprietor to unilaterally terminate the agreement with or without origin, or even if the owner itself is in default, without acquiring a break of the contract. (Stephan et. al. 2007)

4.Why might a contractor agree to a Termination for Convenience provision like that in § 15.4 of the General Conditions?

Ans. Prior to Torncello v. ...