The following Construction practice note provides comprehensive and up to date legal information covering:
In the construction industry, parent company guarantees (PCGs) are commonly given to the employer by the main contractor’s holding company to guarantee the performance of the contract by the subsidiary main contractor. This is a requirement in almost every construction contract where the contractor has a parent. Most frequently, contractors are required to provide a PCG, executed by their parent, at the time of contract signing. Recourse against the parent under the guarantee will thereby be available to the employer if the contractor defaults.
PCGs are found in certain other situations in construction. Occasionally, in some bespoke construction contracts, the guarantor will be a party to the contract itself, but only for the purpose of providing the guarantee. Sometimes collateral warranties are required to be given by contractors to lenders that contain PCG provisions but these are typically resisted. Also, guarantees may sometimes be given to contractors (or subcontractors) by, for example, a developer’s holding company: this is done to secure payments due under the contract. In a similar way, parent companies sometimes agree to provide guarantees to secure advance payments of the contract price to contractors.
A PCG rarely provides protection from the contractor’s insolvency as such, because contractor groups as a whole are likely to be affected when a contractor within that group is insolvent.
Construction contracts involve long term
Free trials are only available to individuals based in the UK
Complete all the fields above to proceed to the next step.
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
The third edition of the Standard Commercial Property Conditions was published on 27 April 2017 a
When transferring an interest in land, any fixtures form part of the land and are transferred with it, unless there is express provision to the contrary. Fittings (also known as chattels) do not form part of the land and will not be included unless it has been expressly agreed otherwise. Difficulty
LR1. Date of the lease[date]LR2. Title Number(s)LR2.1 Landlord's title number(s)[title numbers out of which this Lease is granted. Leave blank if not registered]LR2.2 Other title numbers[existing title number(s) against which entries of matters referred to in LR9, LR10, LR11 and LR13 are to be
A certificate of title (also known as a certificate on title) is a particular species of report on title.When solicitors are instructed to investigate title to land (for instance, when land is being acquired or offered up as security), they will write a report on title for their client, which sets
0330 161 1234