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Construction law - insurance company's liability under bond securing performance of contractor not discharged through unrelated side agreement
28 September 2011
On 21st September 2011 the Technology and Construction Court found that an insurance company's liability undeer a bond securing the performance of the contractor under a building contract, was not discharged by the payment under a side agreement, relating to the contractor's potential claims.The Court found that a separate agreement that was made in relation to the principal contract would only be material if it varied the terms of the contract guaranteed. The Court found that the 'side' agreement in this case did not constitute a variation of the building contract and therefore liability had not been extinguished.
If you should wish to discuss this or any other contract or insurance matter, please contact our Litigation Team.
Andrew Petchey, Partner, Litigation Team
