A city awards a $180,000 paving contract. Because the city's land cannot be liened, the prime must post security that unpaid workers, subcontractors and suppliers can reach. What must it furnish, and from whom?
Explanation
Civil Code §9550 requires a direct contractor awarded a public works contract involving an expenditure in excess of $25,000 to give a PAYMENT bond before commencement of work, and §9554(a) requires that bond to be executed by an admitted surety insurer. The payment bond exists precisely because public property cannot be liened: it stands behind the workers, subcontractors and suppliers who have no lien to record. A performance bond answers to the awarding body for completion of the work, which is a different promise to a different party.
Law Reference: Civil Code §9550; §9554(a)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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