Why might an owner prefer that the general contractor obtain a payment bond rather than rely solely on the contractor to pay subs?
Explanation
A payment bond gives unpaid subcontractors and suppliers a solvent source other than the owner's real property, which reduces the owner's exposure to liens and to paying twice for the same work. (b) describes the performance bond, which answers non-completion — the two bonds are issued together and protect against different failures. (c) misunderstands surety pricing: the premium is earned, and in any case it is a cost the contractor carries into the contract price. (d) is unrelated, since retention is governed by the contract and by Civil Code §8811.
Law Reference: Civil Code §8600 et seq.This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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