The Importance of a Raleigh Contractor Surety Bond
During the construction process, things can go wrong at any time. Construction work is heavily regulated and certain projects require that contractors obtain a surety bond before starting a project. If you are looking to take on public and large-scale projects, securing a Raleigh construction bond will help you win contracts and grow your business.
Surety bonds mitigate risks for all parties and guarantee that a contractor will fulfill the bond’s terms. It is a contract between the following parties:
Principal: The principal (e.g., contractor or building firm) seeks a surety bond from a bonding company which is a guarantee that the principal will complete a task or project.
Obligee: The obligee (e.g., government entity) is the one that has hired the principal to complete a task or project.
Surety: The surety provides the financially backed guarantee to the obligee that the principal will follow the terms of the contract and fulfill its obligation.
Types of Construction Bonds
It is important to know what type of Raleigh construction bond is required of you. There are several types of surety bonds used in the construction industry:
Bid bonds are required of contractors during the bidding stage and guarantee the accuracy of the contractor’s bid, and it guarantees that they will execute the project at the price they listed in the proposal.
Performance bonds are a Miller Act mandate for contracts $100,000 or more. The bond guarantees that the contractor will perform the work according to the conditions of the contract.
Payment bonds are often combined with performance bonds and protect subcontractors and suppliers, ensuring that they are paid in the event that a contractor defaults.
Contact Cotney Construction Law for Bond Disputes and Claims
A Raleigh contractor surety bond is an important component of many construction projects, but so is understanding your bond agreement. If a principal violates the terms of the bond contract, the obligee can file a claim against the bond. If parties disagree on the details of the bond claim, the issue can escalate to a costly and time-consuming legal dispute.
At Cotney Construction Law, we provide reliable and trustworthy representation to contractors, subcontractors, suppliers, and other construction professionals. Our attorneys have an in-depth understanding of bond law as well as extensive experience dealing with sureties on bid bonds, performance bonds, payment bonds, and other pertinent construction bonds. We have filed suit on bond claims at the state, federal, and appellate court level on the behalf of our clients and can help you resolve your bond disputes too.
If you are in need of a professional construction law firm, please submit our contact request form for more information.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.