The Possibility and Significance of Legal Guarantees in the Case of Construction Contracts
The Possibility and Significance of Legal Guarantees in the Case of Construction Contracts

Summary/Abstract: This paper gives a deeper insight into the possible contract guarantees and safeguards from the aspect of the interests and positions of both the contractor and the customer appearing in the opposite poles of the construction contract. The customers appear to be stronger, thus – even with the lack of legal guarantees – they are able to force guarantees mitigating the risks in the contract. Apart from the guarantees listed in the Civil Code, the customers also contributed to the practical spread of the so-called performance bonds. Performance bonds are a part of the agreed contractual fee withheld for the period of warranty after performance or for a period specified in the contract, with the intention of covering the expenses resulting from imperfections and flaws. The paper deals with a range of issues related to the question of the practical use of performance bonds. The contractors, on the other hand, are more vulnerable: for this reason, they have been provided with the protection of statutory lien by the legislator to the extent of the contractual fee. The legal examples regarding the practical application of statutory lien are also presented in detail.

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