Why does an owner require the general contractor to furnish BOTH a performance bond and a payment bond?
Explicación
The performance bond protects the obligee against non-completion; the payment bond protects subcontractors, laborers, and suppliers, and so protects the owner indirectly from claims against the property — and under Civil Code §8600 an owner who files the direct contract and records a payment bond of at least 50 percent of the price before work begins may have lien enforcement restricted to the bond. (a) confuses security for performance with the contract that creates the obligation. (c) reverses cause and effect: bonds are underwritten on the contractor's credit and do not reduce insurance premiums. (d) is a separate statutory duty under B&P §7125 and Labor Code §3700.
Referencia Legal: Civ. Code §8600 / §8608Practica las 1632 preguntas gratis — sin registro.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Preguntas relacionadas de este tema
- Compared to a mechanics lien, a key ADVANTAGE of a stop payment notice for a lower-tier claimant is that it:
- A certificate of insurance shows a policy in force for a full year, but the insurer cancelled that policy the following week. The holder's coverage is:
- On a private remodel with no notice of completion recorded, the owner moves in and all labor stops. The 90-day lien clock runs from:
- In a hold-harmless agreement, the 'indemnitor' is the party that:
- Why serve the preliminary notice at the start of a project, when payment is still arriving on time?
- Which statement about surety bonds is TRUE?
Última revisión: · proceso editorial