Surety meaning

This Checklist This Checklist highlights key matters to weigh up when preparing and finalising a retention bond for a construction scheme. For additional guidance on retention bonds, see Practice Note: Retention bonds. Parties A party whose registered office is outside England and Wales may need to nominate an address for service within England and Wales. Consider carefully before accepting a surety located beyond the UK and, where relevant, confirm the surety is properly authorised to issue bonds in the UK. Always include company registration numbers to enable future identification of the companies. ...

This checklist outlines matters to weigh up when preparing and agreeing an advance payment bond for a construction project. See also Practice Note: Advance payment bonds. Parties Where a party has its registered office outside England and Wales, it may need to nominate a service address within England and Wales. Consider carefully before accepting a surety located outside the UK and, where relevant, verify the surety is properly authorised to issue bonds in the UK. Always include company registration numbers so companies can be identified in the future. The relevant contract Set out the full particulars of the building contract and the works to which the advance payment bond applies, as appropriate...

This checklist highlights the main points to weigh up before making a call (claim) on a conditional bond, also referred to as a default bond. Any call is directed to the surety, typically an insurer or surety firm. Here, we assume a contractor has furnished the bond to its employer; the same approach generally applies where, for instance, a contractor seeks to call a performance bond issued by its sub-contractor. Is the bond on demand or conditional? The drafting of the bond ought to clarify this, though the label it uses is not conclusive. Consider: Who stands as surety? On demand bonds are commonly supported by banks, while conditional bonds are typically supported by an insurer or surety company. Is the contractor named as a party? For an on demand bond, the contractor need not be a party; for a conditional bond, they may well be. What is the extent of the surety’s liability? Where the surety’s duties under the bond operate independently...

TPR confirmed that, under the terms of the new agreement, ITV will bring the 2,800 Box Clever scheme members into its own pension arrangement. This move guarantees members their full entitlements, including back payments owed to them, replacing the reduced-level payments they had been receiving since 2014 under the Pension Protection Fund (PPF). 'Today's announcement shows how we deploy our powers to safeguard savers and, if required, vigorously pursue matters through the courts to secure an acceptable outcome,' said Mel Charles, the regulator's interim executive director of regulatory compliance. Box Clever was created in 2000 as a joint venture between Granada (now part of ITV) and Thorn Finance Ltd, which has since been renamed Carmelite Capital Ltd. When the venture failed in 2003, the pension fund was left underfunded and, as a result, prompted TPR to examine whether ITV had potential financial responsibilities to the scheme. In 2011 TPR warned ITV of its intention to issue financial support directions to five companies that were within its group, on the basis...

Brown-Forman Beverages Europe Ltd v Bacardi UK Ltd [2021] EWHC 1259 (Comm) (19 May 2021) What are the practical implications of this case? The rule from Holme v Brunskill (1877) 3 QBD 495 provides that any material change to the contractual terms between the creditor and the principal debtor releases a guarantor. If a variation has been made, the creditor must demonstrate that the change can only operate to the surety’s advantage, or that by its very character it can never in any situation increase the surety’s exposure. Parties may exclude this rule by agreement, and prudent creditors routinely do so. It has been labelled a snare for the careless creditor. This judgment confirms two significant practical propositions concerning the rule and points to a specific hazard. First, the court reiterates that the rule is confined to guarantees and does not extend to contracts of indemnity. That offers yet another reason why those preparing instruments of suretyship should frame them as indemnities as well as guarantees. Secondly, it clarifies...

In this issue: Banking & Finance case round-up Sustainable finance and ESG round-up Lending Security Sustainable finance Debt capital markets New and updated content Useful information Banking & Finance case round-up Banking & Finance—May 2025 case round-up For an overview of the Banking & Finance cases we flagged in May 2025, see: Banking & Finance—May 2025 case round-up. Sustainable finance and ESG round-up Sustainable finance and ESG monthly round-up—2 June 2025 This Finance Group monthly round-up features: (1) the Financial Markets Standards Board issuing a Statement of Good Practice on governance of sustainability‑linked products, (2) the IFRS Foundation announcing the International Sustainability Standards Board’s proposed amendments to IFRS S2 on greenhouse gas emissions disclosures and (3) the International Organisation of Securities Commissions releasing a report on the sustainable bond market. For further details, see News Analysis: Sustainable finance and ESG monthly round–up—2 June 2025. Lending Beograd Innovation Ltd v Somovidis...

This Practice Note offers a high-level summary of insurance clauses within commercial agreements. It outlines the main categories of insurance commonly used in such agreements and the principal features of insurance clauses and covenants. It is not intended to set out the law of insurance; in that regard, see Insurance contracts—overview. Nor does it consider the many other ways to obtain security for contractual liabilities beyond placing insurance. Given the potential limits of insurance cover, parties may conclude that alternative arrangements suit their needs better, for example obligations of surety such as guarantees from a group and/or parent company, or performance or guarantee bonds. See Types of security—overview for further guidance. Role of insurance clauses in commercial agreements The core function of a commercial contract is to apportion the risks and benefits of the transaction between the parties. Risk can be allocated in various ways; a clear illustration is through indemnities, which require one party to reimburse the other for liabilities they incur under the contract. It is...

No individual may act as an insolvency practitioner (IP) for another at any time unless both: security is maintained for the proper discharge of their functions, and that security satisfies the prescribed conditions for acting in relation to that person This framework exists to safeguard creditors and other interested parties against losses caused by the IP’s fraud or dishonesty, or the fraud or dishonesty of another committed with the IP’s connivance. The expense of putting this security in place is treated as a cost of the insolvency proceedings. Security requirements Terms of the bond The required security is a bond approved by the Secretary of State which must: be in writing or electronic form, include provision whereby a surety undertakes joint and several liability for losses relating to the insolvent debtor arising from the fraud or dishonesty of: the IP, whether acting alone or in collusion with others, or any...

This Practice Note explores the principal parties commonly engaged in a PFI or PF2 project. It outlines the functions of public sector participants, private sector counterparts, finance providers and sub-contractors, together with support providers and other professionals involved. In the 2018 Budget (delivered on 29 October 2018), the government confirmed it would cease using PF2 for new schemes (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). Nonetheless, live PFI and PF2 arrangements remain in operation and, given the usual duration and lifespan of these schemes, are expected to do so for many years to come. Public Sector Authority/Trust This is the public sector organisation that originates and procures the PFI scheme in question and seeks to have the asset constructed and properly maintained (the label 'Trust' applies only to NHS schemes). The public body will typically be a local authority (including fire and rescue and (formerly) police authorities), an NHS Trust or a government department or non-departmental public body. The Authority/Trust enters into a...

DATE [ insert date ] Parties [ insert name ] of [ insert address ] [ incorporated in England and Wales, company registration number [ insert number ] ] (the ‘Surety’) [ insert name ] of [ insert address ] (the ‘Council’) Definitions 1980 Act • means the Highways Act 1980 Bond • this bond agreement for the Bond Sum Bond Sum • the amount of [ insert bond sum specified in the Highway Agreement or as agreed with the Council ] Default Notice • a written notice issued by the Council to the Surety under clause 5.2 of this Bond confirming that the Developer has not carried out and/or completed the Works in accordance with the Highway Agreement, and setting out the sum which, in the [ Proper Officer’s ] opinion, is needed to carry out and complete the Works in accordance with the Highways Agreement and/or to remedy any defect or default of...

Retention bond Schedule Bond number [ insert ] Dated: Parties The Employer: [ insert ] incorporated in [ England and Wales ] (Company Number [ insert ]) with its registered office at [ insert ]. The Contractor: [ insert ] incorporated in [ England and Wales ] (Company Number [ insert ]) with its registered office at [ insert ]. The Surety: [ insert ] incorporated in [ England and Wales ] (Company Number [ insert ]) with its registered office at [ insert ]. (A) The Building Contract: the agreement dated [ insert ] between the Employer and the Contractor for the construction of [ insert ] (the “Works”). (B) Retention: the sum to which the Employer is, or (but for the issue of this Bond) would be, entitled to withhold by way of retention from any amount payable to the Contractor under, and in accordance with, the terms of the Building Contract...

SCHEDULE Bond Number [ insert ] Dated: Parties The Employer: [ insert ], company registered in [ England and Wales ] (Company Number [ insert ]), whose registered office is at [ insert ] The Contractor: [ insert ], company registered in [ England and Wales ] (Company Number [ insert ]), whose registered office is at [ insert ] The Surety: [ insert ], company registered in [ England and Wales ] (Company Number [ insert ]), whose registered office is at [ insert ] The Building Contract: An agreement dated [ insert ] between the Employer and the Contractor for the construction of [ insert ] (the “Works”) Maximum Bond Amount: The total sum of £[ insert ] Expiry Date: [ The date of practical completion/making good defects of the Works in accordance with the Building Contract ] Insolvent/Insolvency: [ Insert the corresponding definition from the Building Contract ] ...

K/S Victoria Street v House of Fraser In K/S Victoria Street v House of Fraser, the Court of Appeal held that a tenant’s surety may neither promise nor provide a guarantee for the tenant’s assignee, save by securing the tenant’s liabilities under an authorised guarantee agreement on assignment...