On a private commercial project the direct contractor furnishes a payment bond. Its primary purpose is to:
Explanation
A payment bond guarantees payment down the chain: §8608 gives the right of recovery to claimants who provided work to the direct contractor, directly or through one or more subcontractors, and §8612 conditions the claim on the preliminary notice the lien law requires. (a) and (b) both describe a performance bond, which answers to the owner for completion and quality — the two bonds are usually bought together and confusing them is the classic error. (c) is not a bonded obligation at all; financing costs are the owner's own.
Law Reference: Civ. Code §8608 / §8612This 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
- After recording a mechanics lien, within what period must the claimant file a lawsuit (action) to foreclose the lien, or the lien becomes unenforceable?
- A 'stop payment notice' (formerly 'stop notice') is a remedy that allows an unpaid claimant to reach:
- On a private work with a construction lender, for a stop payment notice to bind the LENDER to withhold funds, the claimant generally must:
- California law makes which insurance mandatory for a contractor that has employees?
- A licensed contractor holds a C-39 roofing classification and has no employees. Under B&P §7125 as it reads until January 1, 2028, the contractor must:
- The main purpose of a contractor's Commercial General Liability policy is to cover:
Last reviewed: · editorial process