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Calling in / Claim against a Bond:

Under unconditional Bonds, in the event of a default by a Tenderer/Contractor, the Client has the absolute right to call in or appropriate the respective Guarantee without having to prove to the bank that there has been a default by the Tenderer/Contractor unless the guarantee is a conditional one. Thus the wordings of the bank guarantees should be checked for being unconditional and irrevocable and become payable to Client on first demand, without demur and without recourse to any reasons.

However in practical situations, Bonds should be viewed as a deterrent to ill performance rather than an opportunity to punish a Contractor as, doing so could have other implications.

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