Performance Bond

A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.A job requiring a payment and performance bond will usually require a bid bond, to bid the job. When the job is awarded to the winning bid, a payment and performance bond will then be required as a security to the job completion.For example, a contractor may cause a performance bond to be issued in favor of a client for whom the contractor is constructing a building.
Posts about Performance Bond
    • SURETIES DO NOT ISSUE BONDS RISK-FREE TO THE BOND-PRINCIPAL

      If your construction company is bonded, then you have signed a General Agreement of Indemnity with your surety / bonding company. Stated another way, if a surety issued an obligee on behalf of your construction company, as the bond-principal, a payment or performance bond, then you have signed a General Agreement of Indemnity with your surety.

      Florida Construction Legal Updates- 13 readers -
  • HURDLES WITH TRIGGERING A SUBCONTRACTOR PERFORMANCE BOND

    … There have been a couple of decisions as of late, particularly in federal court, that have gone in favor of a performance bond surety and against a general contractor’s claim against a subcontractor’s performance bond. These decisions have been so unfavorable that they may be swaying certain internal decisions to move to subcontractor default…

    Florida Construction Legal Updates- 15 readers -
  • PROPERLY TRIGGER THE PERFORMANCE BOND

    … contractor sued a subcontractor’s performance bond surety for an approximate $1M cost overrun associated with the performance of the subcontractor’s subcontract (the contract made part of the subcontractor’s performance bond). The surety moved for summary judgment arguing that the general contractor failed to property trigger the performance bond…

    Florida Construction Legal Updates- 16 readers -
  • INDUSTRY FORM CONTRACTS SERVE AS A TEMPLATE FOR YOUR CONSTRUCTION CONTRACT

    …, but they still require modifications based on the objectives of the parties and the preferred project delivery method. Download (PDF, 196KB) Please contact David Adelstein at dma@katzbarron.com or (954) 522-3636 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1. This entry was posted in Contract Drafting and tagged AIA, ConsensusDocs, construction contract, DBIA, EJCDC, industry form contract by David Adelstein. Bookmark the permalink.…

    Florida Construction Legal Updates- 11 readers -
  • IS PERFORMANCE BOND LIABLE FOR DELAY DAMAGES?

    … should cover delay damages. On the other hand, Larkin General Hospital is a Florida Supreme Court decision meaning there is a very strong argument that that the performance bond’s liability for delay damages will not be extended beyond the face of the bond. For this reason, and as mentioned above, it is essential that the face of the performance bond…

    Florida Construction Legal Updates- 11 readers -
  • DRAFTING THE BOND FORM, PARTICULARLY THE PERFORMANCE BOND FORM

    … Oftentimes, when it comes to payment and performance bonds (in particular) the bond forms are drafted by the obligee. For example, an owner (as the obligee) may draft the bond forms that it wants its general contractor’s surety to execute. And, a general contractor (as the obligee) may draft the bond form that it wants its subcontractors…

    Florida Construction Legal Updates- 11 readers -
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