CAIB 3 Chapter 5 Surety Bonds PDF
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This document details the various types of surety bonds, including bid bonds, performance bonds, labor bonds, and maintenance bonds, frequently seen in construction and related projects. It outlines the obligations and guarantees associated with each.
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Surety Bonds CAIB 3 Chapter 5 Type of Surety Purpose Bond Bid Bond A bid bond is furnished to the owner (Obligee) of...
Surety Bonds CAIB 3 Chapter 5 Type of Surety Purpose Bond Bid Bond A bid bond is furnished to the owner (Obligee) of a project and is not in force until the contractors tender is accepted. When issued the owner of the project is assured of the following: The principle has been pre-qualified to bid on the project. The principle is bidding in good faith. The surety guarantees the obligee that the principle can and will enter into a contract to perform the work at the tendered price. Provide whatever security is specified to ensure performance of the contract. Performance Bond A performance bond guarantees the following: A) Actual performance of the contract in accordance with its specified terms and conditions. B) That the faulty work will be corrected and defective materials replaced for a period of one year after completion of performance. Labor Bond The above bond guarantees that the sub trades and suppliers will be paid for the work and materials entered into the project. Maintenance Bond The above bond given to the obligee is that the principle will fulfil the warranty obligations stated in the contracts.
