When an owner requires a contractor to post a payment and performance bond, the contractor, invariably, provides a bond in the form of AIA Document A312-2010. The payment portion of the bond is primarily for the benefit of...more
Perfecting a performance bond claim in Texas requires careful attention to legal requirements and procedural details set forth on the face of the bond and under Texas law. Perfection of a performance bond claim is often...more
Bond markets have been in upheaval recently, with knock-on impacts on decisions on whether to make or defend calls on performance security on construction projects. In the first quarter of this year, we saw the continued...more
Construction project participants sometimes disregard contractual formalities, particularly in the "heat" of a project dispute. However, consequences can and often do arise in those circumstances, and sometimes the parties do...more
You are invited to join Procopio’s Construction & Infrastructure Law attorneys and guest industry speakers on Thursday, November 10, 2022, for an informative half-day webinar focused on the most pressing California...more
When representing clients in negotiating and drafting construction agreements for private construction work, I am often asked: Should we require the contractor to provide a bond? This question doesn’t arise on public works...more
Given, well, the state of everything, private owners should seriously consider requiring the contractor to secure a performance bond (a third-party surety guaranteeing the contractor’s performance under the contractor’s...more
Insurers regularly argue that commercial general liability (“CGL”) policies are not performance bonds and therefore there is no coverage for claims seeking damages for defective or faulty workmanship. Insurers also argue...more
If you are a construction contractor, you deal with performance bonds as part of your business and daily work. They are necessary for almost every project you are participating or will participate in, and, along with other...more
A recent decision from the United States District Court for Delaware held that a surety was not liable for consequential damages to a building owner after a default by its contractor because the surety’s liability could not...more
As MGT Construction executives start pleading guilty to conspiracy to commit wire fraud and bank fraud, every construction company executive should reflect on the duties of disclosure owed to their bonding companies....more
Dear YouDig?, We are in the middle of a massive addition to our warehouse. The value is high seven figures in construction services. We don’t do this all the time but we fell in love with the Design-Builder, signed their...more
If an owner terminates a contractor due to a contractor default on a bonded project, can the surety hire the same contractor to complete the work under the bond? Depending on the language of the bond, it may be permissible...more
Construction contracts for commercial projects, including the ongoing boom in apartment projects, routinely require the general contractor and/or the subcontractors to provide performance bonds. Performance bonds are also...more
Legal System - 1. Is your jurisdiction primarily a common law, civil law, customary law or theocratic law jurisdiction? Are the laws substantially derived from the laws of another jurisdiction and, if so, which? What...more
On November 5, 2018, the Federal Circuit held in a precedential decision that bonding requirements in FAR 52.228-15, “Performance and Payment Bonds—Construction,” were read into all construction contracts by operation of law...more
Strickland v. Arch Ins. Co., No. 17-10610, 2018 U.S. App. LEXIS 504 (11th Cir. Jan. 9, 2018) - Strickland provided sand to a paving company (“Douglas”) for a Georgia Department of Transportation (“GDOT”) road improvement...more
The Supreme Court’s Decision in Valard - On September 14, 2016, we published Unpaid Subcontractors Beware, which commented on the Court of Appeal's decision in Valard Construction Ltd v Bird Construction Company, 2016 ABCA...more
Contractors may benefit in making a small equity investment in the projects they construct. The financial benefit can arise from the investment itself and from improved understanding and communication with the owner during...more
An issue that repeatedly comes up in construction disputes is the scope of an arbitration agreement. Courts generally interpret agreements to arbitrate broadly, and, where the arbitrability of a specific claim has been at...more
King Cnty. v. Vinci Constr. Grands Projets/Parsons RCI/ Frontier-Kemper, JV, No. 92744-8, 2017 Wash. LEXIS 743 (July 6, 2017) - King County contracted with three construction firms (collectively, “VPFK”) to construct a...more
On July 6, 2017, the Washington Supreme Court confirmed that the equitable rule announced in Olympic Steamship—providing for attorney fees where the insurer compels the insured to take legal action—applies to performance bond...more
Although other forms of security are possible to secure performance of a construction contract, corporate surety performance bonds remain the construction contract guarantee of choice for owners in both public and private...more
This is part one of a two-part series looking at how court decisions in recent years have thwarted general contractors’ reasonable expectation of coverage under their general liability policies....more
Int’l Fidelity Ins. Co. v. Americaribe-Moriarty JV, 2017 U.S. App. LEXIS 3628 (11th Cir. Feb. 28, 2017) - Americaribe-Moriarty Joint Venture (“Americaribe”) entered into a subcontract with Certified Pool Mechanics I,...more