This case concerned a loan guarantee and was not a construction case. However, a clause similar to the following in the guarantee is often present in demand bonds required by employers in construction projects:-
“A certificate signed by [the creditor] of the amount for the time being of the Indebtedness and/or the amounts due to [the creditor] shall be conclusive evidence for all purposes against [the guarantor] unless manifestly incorrect.” [Interpretation added.]
The guarantor disputed liability on the grounds that certain facts relating to the underlying contract were not disclosed to the guarantor and that the creditor had agreed a varied interest rate with the borrower.
The English Court of Appeal held that:-
The above principle should be equally applicable to demand bonds.