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1. The Guarantor guarantees to the Employer that in the event of a breach of the Contract by the Contractor the Guarantor shall subject to the provisions of this Guarantee Bond satisfy and discharge the damages sustained by the Employer as established and ascertained pursuant to and in accordance with the provisions of or by reference to the Contract and taking into account all sums due or to become due to the Contractor.
   

   Operative: This is the main operative clause of the bond. Calculation of damages due is by reference to the underlying contract. The bond clearly states for the avoidance of doubt that all monies due to the contractor can be offset against the final loss (i.e. retention, unpaid work etc).

2. The maximum aggregate liability of the Guarantor and the Contractor under this Guarantee Bond shall not exceed €xxxxxxx (the "Bond Amount" ) but subject to such limitation and to Clause 4 the liability of the Guarantor shall be co-extensive with the liability of the Contractor under the Contract.
   

   Maximum Liability : Stipulates that the Guarantor can only be held liable to the same extent as the contractor but subject to maximum of the bond amount.

3. The Guarantor shall not be discharged or released by any variations to the extent and nature of the contract, extensions to the period for completion of the works, indulgences, forbearance or concessions, alterations to the terms of payments, compromises or settlements of disputes without reference to the Guarantor, provided such matters do not materially affect the obligations under the contract.

   Variations :The Guarantor cannot be released from the bond as a result of normal or reasonable variations which occur during the course of any contract. However, significant alterations which materially alter the contract are not permitted. If in doubt you should inform the bondsman for clarification of the position.

4. This Bond shall expire 18 months after the date of Practical Completion of the Works as defined by the Contract.

   Expiry : Our bond expires 18 months after Practical Completion rather than on a specific date. Cover is therefore cover maintained regardless of changes in completion dates.

5. The Guarantor shall be notified in writing by registered, faxed or hand delivered letter of any material breach of or default in any of the terms and conditions contained in the Contract and on the part of the Contractor to be performed and observed as soon as possible but in any event within three months after such breach or such default shall have come to the knowledge of the Employer or his representative or representatives having supervision of the Contract.

   Notification : Requires notification in a timely manner which is not only beneficial to the bondsman but often to all concerned. In certain cases default by the contractor can be averted with our intervention.

6. The Employer shall permit the Guarantor to nominate a completion contractor to perform the stipulations and provisions of the Contract which the Contractor shall have failed to perform and observe provided the proposed completion contractor is acceptable to the Employer whose acceptance shall not be unreasonably withheld.

   Right to Nominate : The bondsman is often best placed to nominate the appropriate contractor to complete the contract. This will always be done in co-operation with the design team.

7. No liability shall attach to the Guarantor under this Guarantee Bond in respect of default by the Contractor or breach of the conditions and terms of the Contract where such default or breach was directly or indirectly due to or arising out of War, Invasion, Act of Foreign Enemy, Hostilities (whether War be declared or not), Civil War, Rebellion, Revolution, Riot, Terrorism, Civil Commotion or Military or Usurped Power.

   War Clause : A war clause is standard in any insurance policy and must be included in all bonds issued.

8. If any legal proceedings are brought against the Guarantor to recover any claim hereunder the same must be instituted not later than twelve months after termination of the Bond.

   Legal Proceedings : The bond requires proceedings to be taken in a timely manner.