ABSTRACT
The principal objective of a project contract is positive—the achievement of stated project goals. There is also a negative side, namely the liability on the part of the contractor for failing to achieve the objective completely, or at least in all of the essential aspects contemplated by the parties. That part of the contract which deals with the most obvious manifestation of this negative side is found under the heading of "Guarantees" or "Warranties". In the typical full-scope project agreement, there are generally four distinct categories of "express" guarantees such as Design/mechanical, Field workmanship, Equipment and Performance. In addition to the typical guarantee and warranty considerations, there are certain other liabilities which may normally flow from the quality of a contractor's work or lack of it. A requirement that a contractor comply with all applicable laws and regulations is effectively a specialized type of guarantee.
