Construction Litigation
Construction Remedies and Security
A payment bond obligates a surety to pay subcontractors and suppliers if the principal contractor does not. Public projects require bonds because public property cannot be liened.
Notice and suit deadlines are strictly enforced.
Alternative Names:
Labor and Material Payment Bond, Payment Surety Bond
Why it Matters?
Bond claim deadlines are shorter than lien deadlines in many jurisdictions and are enforced strictly, with notice typically required within ninety days of last furnishing and suit within one year. Claimants that pursued the contractor informally while the deadline ran lose the bond claim entirely. Identifying whether a bond exists is a first step, since public projects always have one and many private projects do as well.
Frequently Confused with
Related terms
Frequently asked questions
Why do public projects require payment bonds?
How strict are the deadlines?
