Installation contracting
A contract often comprises several stages. Two important parts are completion of the actual work, followed – after a final inspection and approval – by a guarantee period. In the first stage, the contractor must complete the construction or installation as stipulated in the contract with the buyer.
The contract is considered to be completed after final inspection and approval. In the second stage, which is concerned with the period after the final inspection, the contractor has responsibility for any faults and deficiencies which might become apparent in the guarantee period. This is either two or five years, depending on the type of contract.
The buyer often asks for one security to ensure that the contractor will fulfil his or her obligations under the contract and another for the guarantee period. Such guarantees are known as performance and maintenance bonds. They protect the buyer from any additional costs he or she might incur if, for example, the contractor goes bankrupt.
Here you can read more about the most common guarantees in such contracts:
Performance bond
Maintenance bond
Bid bond
Construction security
Payment bond
Rental bond
