completion guarantee

completion guarantee
USA
A guaranty granted by a project sponsor or a contractor to ensure a facility or project will achieve final completion. In the case of:
• The project sponsor, it agrees to provide subordinated financing or equity contributions to the project company if required to complete the construction of the project.
• The contractor, an agreement to complete the project in accordance with agreed specifications. This obligation is usually secured by performance bonds or liquidated damages.
For more information on the uses of completion guarantees, see Practice Note, Understanding Project Finance Construction Contracts (www.practicallaw.com/1-422-1870).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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