Advance Payment Guarantee
Q: We are in the construction industry and we use a contract known as an Advance Payment Guarantee and I want to know if this is acceptable please.
Basically, we pay a large percentage of a subcontractor's scope upfront. A third party acts as a guarantor that if the subcontractor fails to deliver (either works or materials) they will pay us back what we have paid upfront.
Please advise if this arrangement is acceptable