Abstract

The judgment under review addresses a number of issues of paramount practical importance related to issuing a “requested payment guarantee" (Art. 6494 § 1 of the Civil Code) by an investor of construction works. First, the Supreme Court assumed that the object of performance of a construction contract (building object) is, in principle, indivisible, but the regulation of the contractual relationship in such a way that the works will be performed and paid for in installments (by stages) indicates divisibility of the performance.
Secondly, basing on uniform opinions in the doctrine, the Supreme Court held that the exclusive authority to determine the content of a guarantee is vested in the entity obligated to issue a guarantee (investor), not its beneficiary (contractor). At the same time, the judgment states that the request for and issuing an unconditional (on first demand) guarantee of payment may, in specific circumstances, constitute an abuse of the security and allow its implementation bypassing the functions of this institution.
In the gloss, an alternative interpretative concept of granting a “requested guarantee of payment” (Art. 6494 § 1 of the Civil Code) is presented, under which the contractor, as a beneficiary, may specify the content and form of the requested guarantee. At the same time, the glossator points out that the request for a guarantee should each time be assessed in the light of the general clauses of Art. 5 of the Civil Code. The factual circumstances in which the request for a guarantee constitutes merely chicanery for the investor (the contractor wishes to create a pretext for withdrawal from the contract in a situation whereby he himself remains in default) or is formulated without any relation to the objectives of the institution of a guarantee of payment (the request for a broadly formulated guarantee addressed to the investor being a public entity) may be a proof that the investor exercises his right in a manner contrary to its social and economic purpose.