What function does the advance deposit fulfill when signing a contract?
As its name indicates, the advance deposit has as main objective, to guarantee the good use of the money that is delivered in advance to any service provider company, for the realization of a work or work.
This type of bond belongs to the group of administrative bonds, which are responsible for ensuring compliance with the obligations established in a contract, order or purchase order.
When starting a work or placing an important order, it is common for the supplier to request an advance payment in order to start work or buy the corresponding material. However, it has happened that the provider does not make good use of this money, causing damage to whoever hires the service, so that this does not happen, it is very important to ask the provider for an advance deposit.
In case the advance is misused, the beneficiary of the policy will be compensated totally or partially (as the case may be), avoiding economic losses.
The bonds in advance, usually issued for 10% of the total value of the contract whose performance being is looking to endorse. To be able to process it, it is necessary that the interested party, be it a physical or moral person, present the documentation requested by the surety (through its intermediaries) and make the corresponding payment.
What types of deposit complement the advance payment in a work or order contract?
Bond of Compliance : guarantees that the obligations established in a work contract, order or purchase order are carried out in a timely manner.
Bail of Hidden Defects and / or Good Quality : guarantees the good quality or repair of any defect that may appear after the work was delivered.
Are you about to start a work or are you going to make an important order? Guarantee with Barrón, the good use of the advance and protect your interests with a bond!