sopimusvakuuden

Sopimusvakuus, often translated as contract security or performance bond, is a type of guarantee used in various contractual agreements, particularly in construction and public procurement. Its primary purpose is to ensure that a party fulfills its contractual obligations. Typically, the party undertaking the work or service (the contractor) provides a sopimusvakuus to the other party (the client or principal).

This security can take several forms, commonly a bank guarantee, an insurance bond, or a deposit of funds. The amount of the sopimusvakuus is usually a percentage of the total contract value, specified in the contract terms. It serves as a financial cushion for the client in case the contractor defaults, fails to complete the work as agreed, or causes damages.

If the contractor meets all their obligations by the contract's end, the sopimusvakuus is released back to them. However, if there is a breach of contract, the client can claim compensation from the sopimusvakuus up to its value. This mechanism protects the client from financial losses resulting from non-performance and encourages contractors to adhere to their contractual commitments. The specific regulations and practices surrounding sopimusvakuus can vary depending on the jurisdiction and the nature of the contract.