Parent Company Guarantees
There are various legal factors that have to be considered when it comes to parent company guarantees in construction projects. It is therefore advisable to make sure you have an experienced law firm on your side to ensure you are covered in every area. At Blackstone Solicitors, we are able to advise many different types of client, no matter the complexity of the structure of any parent guarantee given.
For more information about how our team of construction solicitors can help you, contact us on 0161 929 0121 or complete our online enquiry form and a member of the team will call you back at a convenient time.
How we can help
A parent company guarantee (PCG) in a construction project is a guarantee given by one contracting party’s ultimate or intermediate holding company in favour of the other contracting party to secure the performance of that party’s obligations under the contract.
We are here to help with and advise upon these guarantees and their implications. Be it a single local plot or a site on a much larger scale, we will work with you to make sure everything goes to plan.
Friendly yet direct, our team is passionate about every case we take on, and we believe the entire process requires constant communication. We will, therefore, guide you through the technicalities involved, offering expert advice from start to finish.
Why legal help is important
PCGs are often used in relation to construction projects to enhance the financial reliability of a building contractor and is a contractual agreement to ensure the guaranteed party performs their obligations under a contract. The guarantor will have no greater liabilities than those of the building contractor in the building contract. Additionally, the guarantee will end if the underlying building contract is terminated for whatever reason.
There is a difference between an indemnity and a guarantee. In the case of an indemnity, they are independent of the underlying contract and, therefore, generally survive the termination of the underlying contract.
There is often a marked difference between the requirements of the developer and principal contractor on a project. Developers will try and ensure the terms of any guarantee combine both an indemnity and guarantee from the guarantor. Conversely, the contractor will try to limit the guarantee so that the parent company obligations are limited to those of a guarantor. Further, you may wish to consider insuring the PCG.
Enforcement and the initial creation of these guarantees requires careful consideration as there are a number of potential pitfalls.
Our team prides itself on being able to meet every need of each of our clients. We are willing to go the extra mile when other firms are not, ensuring our clients are given the very best opportunity of getting the outcome they are after. Get in touch to see how our specialist team can help you with parent company guarantees and their use in a construction project.
Speaking to one of our solicitors is easy, simply call us on 0161 929 0121 or allow us to get in touch with you by filling in our online enquiry form. Our services are available to clients throughout the UK, including Manchester, London, Cheshire and Chester, as well as to those living abroad.