ABSTRACT
Payment guarantees refers to the guarantees for payment of goods issued by the buyer or proprietor to the seller or contractor, which ensures that the buyer or the contractor shall fulfill its obligation of payment according to the commercial contract. The payment guarantees in subcontracts are classified into those by the contractor and those by the subcontractor, of which that by the contractor refers to guarantees of the contractor for its subcontractors, suppliers and workers (including peasant workers, same below), ensuring that the contractor shall pay its subcontractors, suppliers and workers for all costs and wages under the terms of the contract, while those guarantees by the subcontractor refers to guarantees of the subcontractor for the contractor, ensuring that the subcontractor shall pay suppliers and workers for all their costs and wages under the terms of the construction contract. The two types of guarantees play an important role in standardizing subcontracting in the construction market in China.
