As good as cash? The diminution of the autonomy principle
Dixon, William M. (2004) As good as cash? The diminution of the autonomy principle. Australian Business Law Review, 32(6), pp. 391-406.
The recent decision of Austin J in Boral Formwork v Action Makers highlights significant statutory inroads into the autonomy principle, as it applies to bank guarantees and unconditional performance bonds. To explore whether these instruments should continue to be accepted in lieu of cash retentions, this paper examines the autonomy principle and its exceptions (both common law and statutory). The conclusion reached is that the uncertain, and potentially broadening, operation of both the common law and statutory exceptions to the autonomy principle may significantly curtail the use of bank guarantees and unconditional performance bonds as cash equivalents. For a bank guarantee or unconditional performance bond to function as a risk allocation device (as well as a security), an intended beneficiary will need to routinely implement certain safeguards. Placing blind faith in the autonomy principle will no longer suffice.
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|Item Type:||Journal Article|
|Additional Information:||Reproduced in accordance with the copyright policy of the publisher: This journal is available online - use hypertext link..|
|Subjects:||Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Commercial and Contract Law (180105)|
|Divisions:||Current > QUT Faculties and Divisions > Faculty of Law|
|Copyright Owner:||Copyright 2004 Thomson Legal & Regulatory|
|Deposited On:||16 Mar 2007 00:00|
|Last Modified:||29 Feb 2012 13:06|
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