On Demand Performance Bonds – How to make them less of a threat

Contractors tend to be wary of  ‘on demand’ performance bonds as there is usually no protection against the bond being called unfairly. The courts have generally refused to prevent a bond from being called except in the case of proven fraud.

But a new case this month, Simon Carves v. Ensus UK,  suggests that if the underlying contract contains restrictions on the client’s right to call the bond, then the English courts will grant an injunction preventing payment.   For more details, see this article on Giles Dixon’s website.