Published Date: 26.03.2026

The Customer's Repudiation of a Government Contract as Grounds for Bank Guarantee Invocation

Annotation

Legal support for construction projects is closely linked to issues of compensation for losses and expenses of both parties. The article studies the procedure for compensating losses of both parties to a construction contract in the event of its termination at the initiative of the state customer. The provisions of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code) and Federal Law No. 44-ФЗ on the Contract System in the Sphere of Procurement of Goods, Works, Services for Meeting State and Municipal Needs dated April 5, 2013 (hereinafter referred to as the Law on the Contract System) do not contain rules according to which the failure to fulfill or improper fulfillment by the contractor of obligations under the contract is an unconditional basis for the customer to fully retain funds received as a result of payment under a bank guarantee. At the same time, in practice, there are increasingly more cases of abusing the right to invoke the bank guarantee by the customer. It seems that the formal termination of a government contract cannot be an independent and sole basis for filing a claim.




Library

1. Анатомия убытков / О. Егорова, Д. Жарский, И. Жарский [и др.]. Москва : Статут, 2023. 216 с.

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