Can I call the performance bond if the contractor goes into liquidation?
A performance bond is a separate promise by a bank or insurer, so the contractor's liquidation does not by itself stop a valid call. What matters is the bond's wording. An on-demand bond is paid against a compliant demand, and a court will restrain the call only for fraud or unconscionability shown on a strong prima facie case. An indemnity or conditional bond requires you to prove breach and loss. Either way, the call must be made before the bond expires.
From the RRD Field Guide, checked against the sources cited in Contractor Insolvency in Singapore: How Owners Protect Themselves If the Contractor Goes Bust. General information, not advice for your project.
The fuller picture
If your contractor becomes insolvent, the money you have not yet paid is your main protection. Pay only against work done, hold a performance bond and check its expiry, keep the right to terminate and step in, and use SOPA section 24 to pay unpaid subcontractors directly where needed. Anything the insolvent contractor still owes you becomes a proof of debt in its liquidation, usually recovered at a fraction.
More questions on this topic
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