For the first time in over twenty-five years, the AIA has revised and recently released its A312-2010 Payment and Performance Bonds. All owners, contractors, subcontractors and suppliers should take note that the revisions to both the Payment and Performance Bonds substantially impact the rights, duties and obligations of all parties to the surety relationship.
A312-2010 Payment Bond
Section 1 – Section 1 (i.e. the contractor and surety’s obligation to jointly and severally bind themselves to the owner to pay for labor, materials and equipment furnished for use in the performance of the contract) was ostensibly modified in response to a recent Court decision which held that Section 1 was, in fact, an obligation independent of the rest of the Bond. In attempting to remedy such a ruling, the AIA modified Section 1 to state that the conditions contained therein are, in fact, subject to the remaining provisions and terms of the bond.
Please see full publication below for more information.
