Damages in contract.
S DEB
(Querist) 08 November 2014
This query is : Resolved
I invite solution to this legal problem.
A contract was awarded and the contractor submitted performance bank guarantee of Rs 60 lakhs. Work started by the contractor and at the fag end of the work the contractor abandoned the work. Work remaining worth of Rs 5 lacs was still to be executed. The contractor was paid in full for the quantum of work executed and there are no pending bills and liquidated damages cannot be levied as there are no running bills to be paid to the contractor.
Now the question is whether we can go for invoking the performance bank guarantee of Rs. 20 lakhs? If we do so can we say that the principle of "undue enrichment" does not hold good in this case ?
Devajyoti Barman
(Expert) 08 November 2014
You should not invoke Bank Guarantee.
The same is done to ensure performance of work not for getting a miniscule work left to be done.
ajay sethi
(Expert) 08 November 2014
issue contractor legal notice to complete balance wok as per the contract . inform him that in case he fails to complete the work you will get it done by some other contractor and recover the costs for carrying out the work from him
Rajendra K Goyal
(Expert) 08 November 2014
The terms of performance Bank guarantee need to be referred. If the evocation is within the scope of terms the guarantee is to be evoked for full amount, if in part evocation clause is not available.
