Sim Chee Siong

Introduction In construction claims, the question of damages is often one of the key areas of dispute, given the importance of liquidity in the industry and the potential impact that a substantial amount of claims can have on the solvency of a company. Issues such as the justification and basis of claims, quantum of damages, and validity of liquidated damages clauses frequently take centre stage.

Introduction On-demand unconditional performance bonds are a common feature in the construction industry – these are performance bonds that allow the beneficiary to demand payment without needing to prove that the counterparty has breached their contractual obligations. A frequent issue arises when the beneficiary seeks to use the bond to recover back-charges incurred on behalf of the counterparty.

Introduction It has often been said that an unconditional on-demand bond is "as good as cash", and that the bond issuer (usually a bank) must pay the specified sum to the beneficiary upon receipt of a compliant demand. As an unconditional on-demand bond is entirely independent of the underlying contract between the bank's customer and the beneficiary, the bank will generally not concern itself with the merits of any underlying dispute between the beneficiary and its customer.