The Guarantee Company of
North America v. Raeside highlights the enforceability of
surety rights under a General Indemnity Agreement (GIA). For a
party to advance defences such as non est factum or relief
from forfeiture, substantial proof to substantiate these defences
is needed. Otherwise, a court will seek to uphold the terms of the
GIA, however onerous those may seem.
When surety bonds are issued, underlying indemnity agreements
provided to the surety are required. These indemnity agreements
ensure that obligations—whether in construction, commercial
contracts, or other ventures—are met, and they provide
security to the party relying on that performance. The
Guarantee Company of North America v. Raeside offers
valuable insight into how surety rights work, and what can happen
when the obligations under an indemnity agreement are not
fulfilled.
