Construction project quality guarantee (warranty) (hereinafter referred to as the guarantee) refers to the contractor and the contractor agreed in the construction contract, from the payable project payment set aside to ensure that the contractor in the defect liability period of defects in the construction works of the defects in the maintenance of the funds. The so-called defects refers to the quality of the construction works does not comply with the mandatory standards of construction, design documents, as well as the agreement of the contracting contract. The defects liability period is generally 6 months, 12 months or 24 months, which can be agreed by both parties in the contract. Construction projects using government investment in whole or in part shall reserve a security deposit of about 5% of the total amount of the settlement of the project price. If the social investment projects use the method of reserving deposit, the proportion of reserving deposit can be referred to.
Payment of security deposit emphasizes the guarantee of the interests of the bidding party or the interests of the investor, this guarantee can be borne either by the successful contractor or by a third party, but subject to the approval of the bidding party to be effective, which gives rise to a third party to assume joint and several liability, and therefore has the substitutability.
Payment performance guarantee is the project contractor in order to prevent the contractor in the process of contract execution in violation of the contract or default, and make up for the economic losses caused to the contractor. The form of payment security (also called performance bond), performance bank guarantee and performance bond three kinds. Payment bond can be used for certified checks, bank drafts or cash checks, the performance bond is generally not more than 10% of the contract price.
Classification
Commercial Contracts
1. (Commercial Contracts) A contractual performance bond is a monetary guarantee for the fulfillment of a contract. And it is refunded only when the contract between the parties expires or is canceled by law. It is not a statutory form of security for a debt and lacks legal basis in its nature and effect.
Futures field
2. (Futures field) A deposit placed in a trading account by the buyer and seller of a futures contract or by the seller of an option in order to secure the performance of the contract. Commodity futures margin is not a stock payment or a deposit made in advance to trade the commodity, but is a good faith deposit.
Detailed
The payment of a margin is a financial guarantee by the buyer and seller to ensure performance.
Traders in the futures market are required to deposit a certain amount of performance margin at the time of trading. The amount of the margin is set by the exchange that offers the contract for trading, and it is usually 5-15% of the total value of the contract, but of course, brokers or commissioned brokers will also set an optional additional margin, which will not be less than the level set by the exchange.
In addition, the level of margin is also affected by the amount of market trading risk, in the more volatile market usually have to pay more margin. At the same time, hedging and speculative transactions on the margin to be different, generally the former margin charged relatively low.
Margin is divided into initial margin and additional margin. Initial margin is the margin that traders are required to pay before trading.
Because of price changes, the trader suffered book losses from the margin deducted, thus causing the margin to fall, when down to the lower limit of the margin (the exchange generally stipulates that there is a lower limit of the margin), brokers have to require that the trader to pay a part of the margin, in order to make the account to reach the level of the initial margin, the part of this additional, called the additional margin.
Margin is independent and must be collected, stored, executed and returned by an organization recognized by both parties.
Legal basis
The Chinese People's *** and National Code
Article 386 The person who has the right to the security right in the case of the debtor fails to perform the mature debt or the occurrence of the parties agreed to realize the security right, according to the law, enjoys the right to priority of compensation on the secured property, but the law provides otherwise.
Article 586 The parties may agree that one party shall pay a deposit to the other party as security for the claim. A deposit contract is established when the deposit is actually delivered.
The amount of the deposit shall be agreed by the parties; however, it shall not exceed twenty percent of the subject matter of the main contract, and the portion in excess shall not have the effect of a deposit. The actual delivery of the deposit amount is more or less than the agreed amount, is deemed to change the agreed amount of the deposit.
Article 587 The debtor to fulfill the debt, the deposit shall be offset against the price or recovered. The party who pays the deposit does not perform the debt or the performance of the debt does not meet the agreement, resulting in failure to achieve the purpose of the contract, shall not have the right to request the return of the deposit; the party who receives the deposit does not perform the debt or the performance of the debt is not in accordance with the agreement, resulting in failure to achieve the purpose of the contract, the deposit shall be doubled back.