{"id":14317,"date":"2019-10-03T23:02:11","date_gmt":"2019-10-03T23:02:11","guid":{"rendered":"https:\/\/examchum.uk\/?p=14317"},"modified":"2019-10-10T08:23:38","modified_gmt":"2019-10-10T08:23:38","slug":"main_contractor_bankrupt","status":"publish","type":"post","link":"https:\/\/examchum.uk\/landscape-architecture\/main_contractor_bankrupt\/","title":{"rendered":"What happens when the main contractor goes bankrupt?"},"content":{"rendered":"<p>[vc_row][vc_column][vc_column_text]The legal implications of a main contractor going bankrupt are relatively simple. In terms of contractual relationships, a bankruptcy will have the following effects:<\/p>\n<ul>\n<li>First, the <a href=\"https:\/\/examchum.uk\/landscape-architecture\/contractor-under-the-cdm-regs-2015\/\">contractor<\/a> will stop carrying out any work \u2013 this will be a breach of contract between the <a href=\"https:\/\/examchum.uk\/landscape-architecture\/commercial-client-under-cdm-regs-2015\/\">Client <\/a>and main contractor<\/li>\n<li>Second, the contractor will stop paying his <a href=\"https:\/\/examchum.uk\/landscape-architecture\/contractor-under-the-cdm-regs-2015\/\">sub-contractors<\/a> \u2013 this will be a breach of contract between the main contractor and sub-contractor.<\/li>\n<\/ul>\n<p>There are two or three key structures that can be put in place to protect against contractor insolvency and they are generally standard on most large projects.<\/p>\n<ul>\n<li>One common option is a <a href=\"https:\/\/examchum.uk\/landscape-architecture\/performance-bond\/\"><strong>performance bond<\/strong><\/a> so that money can be claimed from a guarantor bank at short notice, often simply on-demand.<\/li>\n<li>A second and very common option is to obtain <a href=\"https:\/\/examchum.uk\/landscape-architecture\/collateral-warranty\/\"><strong>collateral warranties<\/strong><\/a> from as any many different people engaged on a project as possible. This will enable a direct claim to be made against these people in the event of a problem arising.<\/li>\n<li>A third option is to obtain a <strong>parent company guarantee <\/strong>\u2013 this is useful where a large contractor is using a regional subsidiary or special purpose vehicle to carry out a project.<\/li>\n<\/ul>\n<p>However, these normally don\u2019t take effect until conclusion of a project. Thus, they are useful in the event of latent defects, but are of limited use if a main contractor becomes insolvent in the middle of a project. There is no way for a developer to completely insulate himself from loss flowing from contractor insolvency which is why the selection of the contractor in the first place is probably the most important step of all.[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One common option is a performance bond so that money can be claimed from a guarantor bank at short notice, often simply on-demand.<\/p>\n","protected":false},"author":1,"featured_media":11088,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[153,20],"tags":[591,415,178,423,115,427,580],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What happens when the main contractor goes bankrupt? - ExamChum<\/title>\n<meta name=\"description\" content=\"One common option is a performance bond so that money can be claimed from a guarantor bank at short notice, often simply on-demand.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/examchum.uk\/landscape-architecture\/main_contractor_bankrupt\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What happens when the main contractor goes bankrupt? 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