Page 262 - Urban Construction Project Management

ance and Bonds
217
Insurance and Bonds 217
Insur
Exhibit 10-4
KNOW ALL MEN BY THESE PRESENTS: That (name of subcontractor) as
Principal, hereinafter called Principal, and (name of Surety Company), as Surety, Sample
hereinafter called Surety, are held and firmly bound unto (name of Owner/CM/GC), subcontractor
as Obligee, hereinafter called Obligee, in the amount of Dollars ($ amount of the performance bond.
bond), for the payment whereof Principal and Surety bind themselves, their heirs,
executors, administrators, successors and assigns, jointly and severally, firmly by
these presents. WHEREAS, Principal has by written agreement dated (date of
signed contract between Principal and Owner/CM/GC) entered into a subcontract
with Obligee for (description of the project and scope of work to be performed)
in accordance with drawings and specifications prepared by (name of Architect,
Engineer, and Specialty Consultants) which subcontract is by reference made a
part hereof, and is hereinafter referred to as the subcontract. NOW, THEREFORE,
THE CONDITION OF THIS OBLIGATION is such that, if Principal shall promptly
and faithfully perform said subcontract, then this obligation shall be null and void;
otherwise it shall remain in full force and effect. Whenever Principal shall be, and
be declared by Obligee to be in default under the subcontract, the Obligee having
performed Obligee’s obligations there under:
(1) Surety may promptly remedy the default subject to the provisions of paragraph
3 herein, or;
(2) Obligee after reasonable notice to Surety may, or Surety upon demand of
Obligee may arrange for the performance of Principal’s obligation under the
subcontract subject to the provisions of paragraph 3 herein;
(3) The balance of the subcontract price, as defined below, shall be credited
against the reasonable cost of completing performance of the subcontract.
If completed by the Obligee, and the reasonable cost exceeds the balance of
the subcontract price the Surety shall pay the Obligee such excess, but in no
event shall the aggregate liability of the Surety exceed the amount of this
bond. If the Surety arranges completion or remedies the default, that portion
of the balance of the subcontract price as may be required to complete the
subcontract or remedy the default and to reimburse the Surety for its outlays
shall be paid to the Surety at the times and in the manner as said sums
would have been payable to Principal had there been no default under the
subcontract. The term balance of the subcontract price, as used in this para-
graph, shall mean the total amount payable by Obligee to Principal under the
subcontract and any amendments thereto, less the amounts heretofore prop-
erly paid by Obligee under the subcontract.

Any suit under this bond must be instituted before the expiration of
two years from date on which final payment under the subcontract
falls due.

No right of action shall accrue on this bond to or for the use of any person or
corporation other than the Obligee named herein or the heirs, executors, admin-
istrators or successors of the Obligee.

(Continued)