The Western Cape High Court held that the principal debtor (in this case the contractor under a building contract) can apply to court to rectify a guarantee between the guarantor (an insurer) and the beneficiary under the guarantee (the employer) where the contractor had given a counter indemnity to the insurer.
A guarantee contract is
The guarantor in Raubex Construction (Pty) Ltd v Bryte Insurance Company alleged that payment under a guarantee was not due because of fraud on the part of the beneficiary. A mere error, misunderstanding or oversight, however unreasonable, does not amount to fraud and is insufficient to show that the contentions of the beneficiary are deliberately
When an engineering company sought to recover under a contractors bond (construction guarantee) for unpaid fees for engineering services rendered, a court held that a bond which provided protection for entities that have ‘performed labour or furnished materials in the prosecution of the work’ did not include the engineer’s professional engineering services which were not