Construction Law

Julian Bailey

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CHAPTER 12 SECURITY FOR PERFORMANCE

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Introduction

12.01 Construction and engineering contracts, and cognate contracts, represent a consensus of promises. The contractor promises that it will perform certain work, and the owner promises that it will pay the contractor for performing that work.

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Where a party breaks its promise, and fails without proper excuse to do what it promised to do, the innocent party is, in law, entitled to a remedy - usually damages.1 The adequacy of damages as a remedy for a breach of contract will, however, depend to a large extent on the ability of the innocent party to enforce that remedy against the party in breach. If the party in breach is impecunious, or if the party is difficult to trace or bring an action against, an award of damages (if obtainable at all) may prove to be an empty remedy.2

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