South Lanarkshire Council v Aviva Insurance Ltd

Banking and finance – Lending and security – Performance bonds and guarantees. Court of Session: In an action in which the pursuer sought payment by the defender of the £3,117,724 which it averred was due under a 'Performance Guarantee Bond' the defender had granted to it, the court held that on a proper construction of the bond it was not, as the defenders contended, an ordinary guarantee—it was a performance bond; the defender assumed an autonomous obligation to make payment to the pursuer in the circumstances referred to in the bond; the notice the pursuer served complied with the bond's requirements and the defender became liable to make the payment claimed in the notice within 30 working days of its receipt.

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