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forfeiture of security bond

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forfeiture of security bond

Post by star39 on Mon Dec 20, 2010 3:19 pm

Hello everyone,

I would like to ask your valued opinion.What if the winning bidder partially delivered some of the goods but defaulted in the delivery of the other 50 % of the goods even if they were granted extension to deliver.

Questions:
a) May we terminate the contract in part (partial)?
b) May we forfeit their security bond?
c) Is the forfeiture partial or full amount of the bond?
d) Is there any law which requires us to prove actual loss so that the insurance company may determine the amount of liability?

Thank you very much guys!!!!!!!!!
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Re: forfeiture of security bond

Post by RDV @ GP3i on Sun Jan 09, 2011 1:19 pm

star39 wrote: Hello everyone,

I would like to ask your valued opinion.What if the winning bidder partially delivered some of the goods but defaulted in the delivery of the other 50 % of the goods even if they were granted extension to deliver.
Questions
a) May we terminate the contract in part (partial)?
Yes, you can terminate the contract in part. How could you terminate the contract in full when there is already a partial delivery and you have already accepted that delivery?
star39 wrote:b) May we forfeit their security bond?
c) Is the forfeiture partial or full amount of the bond?
For the 2 questions, yes, you may also forfeit the performance security but only that part corresponding to the undelivered portion.
star39 wrote:d) Is there any law which requires us to prove actual loss so that the insurance company may determine the amount of liability?
You do not have to prove actual loss or damages in order to claim from the insurance company pertaining to the performance security. The performance security was posted as a guarantee that the winning bidder will perform its end of the contract within the given period of time (including time extensions that you have granted the supplier) and failure to do so, he will be liable for non-performance and one of your remedies is the forfeiture of the performance security. Another administrative remedy that you may institute is to impose liquidated damages. You do not also need to prove actual damages in order to impose and claim liquidated damages.
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Re: forfeiture of security bond

Post by star39 on Mon Jan 10, 2011 9:27 am

Thank you very much for the help RDV @GP3i. God bless.
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Re: forfeiture of security bond

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