The primary purpose of a bid bond on a California public works project is to:
Explanation
Bidder's security, usually a bid bond, protects the awarding body against an apparent low bidder that refuses to execute the contract or to post the performance and payment bonds Public Contract Code §10221 requires; the surety then pays the lesser of the bond amount or the difference between that bid and the next acceptable bid. Payment of subcontractors and suppliers is the payment bond's promise under Civil Code §9550. Completion on schedule is the performance bond's promise. Workmanship defects are covered by the contract's warranty terms, not by a bond posted with the bid.
Law Reference: Public Contract Code §20170; §10221This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- A self-employed contractor pays federal estimated income taxes quarterly. For income earned during a normal calendar year, which set of due dates is correct?
- A general contractor pays an unincorporated subcontractor $3,400 over the calendar year for services. For federal and California tax reporting, the contractor must issue which form to the subcontractor?
- In addition to the $25,000 Contractor License Bond, a contractor whose license has been suspended for failing to pay a final, unsatisfied construction-related judgment must post which additional security to be reinstated?
- Under California home improvement contract law, the down payment a contractor may collect from an owner before any work is done or materials are delivered is limited to:
- On a residential swimming pool contract, what is the maximum down payment a contractor may receive before work begins?
- A consumer wins a final judgment of $50,000 against a licensed contractor for fraudulent home improvement work. The CSLB license bond is $25,000. What is the most the claimant can recover from the bond itself?
Last reviewed: · editorial process