The adissant party will often endeavor to limit its liability to direct losses, such as. B costs related to the repair of material defects and to exclude from the infringement liability for consequential damages. If such a clause is to be accepted by a beneficiary, it may be useful for the ancillary agreement to explicitly set out the excluded losses. These clauses limit the guarantor`s liability to the liability contained in the main agreement and stress the need to check the terms of this agreement in order to determine the limits it may contain, for example. B the ceilings on monetary liability. In addition to the agreement that the counterparty agrees not to terminate the contract if it has the right to do so in accordance with the project document, it will also accept that the step-by-step process may be triggered by the lenders` notification of a project company`s default under the Facility Agreement, by implementing the collateral or by accelerating the loan. The guarantor`s promise to abide by the terms of the main agreement is the nature of the ancillary agreement and such a promise should not be restricted. The ancillary agreement often also defines the level of competence, diligence and diligence that the guarantor must provide in the provision of the services/works under the primary contract. However, in order to avoid uncertainty, the obligations of competence and diligence must be coordinated in the primary contract and in the ancillary contract. Safety guarantees (and/or due diligence/direct agreements) play a vital role in most construction and engineering projects. Over time, the terms of ancillary agreements have been refined and the parties often attempt to negotiate significant limitations of liability as part of the agreement. In the end, regardless of the agreed terms, the “guarantees” will always be as good as the underlying contract. It is therefore always necessary to ensure that any agreement “speaks of the other”.
Where appropriate, a direct agreement may include clauses in which the counterparty to the project document agrees to the collection or assignment as security of the project company`s rights contained in the project document. Direct agreements usually contain provisions that cover the following topics: a direct agreement is an agreement that grants project lenders direct rights in certain important project documents. These rights are explained in direct agreements in the context of project financing transactions – key provisions. In addition to this guarantee, project lenders generally expect direct contractual relationships with counterparties with key project documents. This is achieved through direct agreements. An equivalent clause in the law of defence allows the guarantor to rely on the objections he has against the original party in the primary contract in the event of a claim from the ancillary contract. It also means that it is essential to carefully review the terms of the primary agreement. If a beneficiary is willing to accept an equivalent defence clause, this will often be done on the basis of “compensation” and counter-claims. .