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I . The Contractor and the Surety, jointly and severally, bind themselves, their
<br />heirs, executers, administrators, successors and assigns to the Owner for the
<br />performance of the Construction Contract, which is incorporated herein by
<br />reference.
<br />2. If the Contractor performs the Construction Contract, the Surety and the
<br />Contractor shall have no obligation under this Bond, except to participate in
<br />conferences as provided in Subparagraph 3.1.
<br />3. If there is no Owner Default, the Surety's obligation under this Bond shall
<br />arise after:
<br />3.1. The Owner has notified the Contractor and the Surety at its address
<br />described in Paragraph 10 below, that the Owner is considering
<br />declaring a Contractor Default and has requested and attempted to
<br />arrange a conference with the Contractor and the Surety to be held
<br />not later than fifteen days after receipt of such notice to discuss
<br />methods of performing the Construction Contract. If the Owner,
<br />the Contractor and the Surety agree, the Contractor shall be
<br />allowed a reasonable time to perform the Construction Contract,
<br />but such an agreement shall not waive the Owner's right, if any,
<br />subsequently to declare a Contractor Default: and
<br />3.2. The Owner has declared a Contractor Default and formally
<br />terminated the Contractor's right to complete the contract. Such
<br />Contractor Default shall not be declared earlier than twenty days
<br />after the Contractor and the Surety have received notice as
<br />provided in Subparagraph 3.1: and
<br />3.3. The Owner has agreed to pay the Balance of the Contract Price to
<br />the Surety in accordance with the terms of the Construction
<br />Contract or to a contractor selected to perform the Construction
<br />Contract in accordance with the terms of the contract with the
<br />Owner.
<br />4. When the Owner has satisfied the conditions of Paragraph 3, the Surety
<br />shall promptly and at the Surety's expense take one of the following actions:
<br />4.1. Arrange for the Contractor, with consent of the Owner, to perform
<br />and complete the Construction Contract: or
<br />4.2. Undertake to perform and complete the Construction Contract
<br />itself, through its agents or through independent contractors: or
<br />4.3. Obtain bids or negotiated proposals from qualified contractors
<br />acceptable to the Owner for a contract for performance and
<br />completion of the Construction Contract, arrange for a contract to
<br />be prepared for execution by the Owner and the contractor selected
<br />with the Owner's concurrence, to be secured with performance and
<br />payment bonds executed by a qualified surety equivalent to the
<br />bonds issued on the Construction Contract, and pay to the Owner
<br />the amount of damages as described in Paragraph 6 in excess of the
<br />Balance of the Contract Price incurred by the Owner resulting from
<br />the Contractor's default: or
<br />4.4. Waive its right to perform and complete, arrange for completion,
<br />or obtain a new contractor and with reasonable promptness under
<br />the circumstances:
<br />1. After investigation, determine the amount for which it may
<br />be liable to the Owner and, as soon as practicable after the
<br />amount is determined, tender payment therefor to the Owner:
<br />or
<br />2. Deny liability in whole or in part and notify the Owner citing
<br />reasons therefor.
<br />5. If the Surety does not proceed as provided in Paragraph 4 with reasonable
<br />promptness, the Surety shall be deemed to be in default on this Bond fifteen days
<br />after receipt of an additional written notice from the Owner to the Surety
<br />demanding that the Surety perform its obligations under this Bond, and the
<br />Owner shall be entitled to enforce any remedy available to the Owner. If the
<br />Surety proceeds as provided in Subparagraph 4.4, and the Owner refuses the
<br />payment tendered or the Surety has denied liability, in whole or in part, without
<br />further notice the Owner shall be entitled to enforce any remedy available to the
<br />Owner.
<br />6. After the Owner has terminated the Contractor's right to complete the
<br />Construction Contract, and if the Surety elects to act under Subparagraph 4.1,
<br />4.2, or 4.3 above, then the responsibilities of the Surety to the Owner shall not be
<br />greater than those of the Contractor under the Construction Contract, and the
<br />responsibilities of the Owner to the Surety shall not be greater than those of the
<br />Owner under the Construction Contract. To the limit of the amount of this Bond.
<br />but subject to commitment by the Owner of the Balance of the Contract Price to
<br />mitigation of costs and damages on the Construction Contract, the Surety is
<br />obligated without duplication for
<br />6.1. The responsibilities of the Contractor for correction of defective
<br />work and completion of the Construction Contract:
<br />6.2. Additional legal, design professional and delay costs resulting
<br />from the Contractor's Default, and resulting from the actions or
<br />failure to act of the Surety under Paragraph 4: and
<br />6.3. Liquidated damages, or if no liquidated damages are specified in
<br />the Construction Contract, actual damages caused by delayed
<br />performance or non - performance of the Contractor.
<br />7. The Surety shall not be liable to the Owner or others for obligations of the
<br />Contractor that are unrelated to the Construction Contract, and the Balance of the
<br />Contract Price shall not be reduced or set off on account of any such unrelated
<br />obligations. No right of action shall accrue on this Bond to any person or entity
<br />other than the Owner or its heirs, executors, administrators, or successors.
<br />8. The Surety hereby waives notice of any change, including changes of time,
<br />to the Construction Contract or to related subcontracts, purchase orders and other
<br />obligations.
<br />9. Any proceeding, legal or equitable, under this Bond may be instituted in
<br />any court of competent jurisdiction in the location in which the work or part of
<br />the work is located and shall be instituted within two years after Contractor
<br />Default or within two years after the Contractor ceased working or within two
<br />years after the Surety refuses or fails to perform its obligations under this Bond,
<br />whichever occurs first. If the provisions of limitation available to sureties as a
<br />defense in the jurisdiction of the suit shall be applicable.
<br />10. Notice to the Surety, the Owner or the Contractor shall be mailed or
<br />delivered to the address shown on the signature page.
<br />11. When this Bond has been furnished to comply with a statutory or other
<br />legal requirement in the location where the construction was to be performed,
<br />any provision in this Bond conflicting with said statutory or legal requirement
<br />shall be deemed deleted herefrom and provisions conforming to such statutory or
<br />other legal requirement shall be deemed incorporated herein. The intent is that
<br />this Bond shall be construed as a statutory bond and not as a common law bond.
<br />12. Definitions.
<br />12.1. Balance of the Contract Price: The total amount payable by the
<br />Owner to the Contractor under the Construction Contract after all
<br />proper adjustments have been made, including allowance to the
<br />Contractor of any amounts received or to be received by the Owner
<br />in settlement of insurance or other claims for damages to which the
<br />Contractor is entitled, reduced by all valid and proper payments
<br />made to or on behalf of the Contractor under the Construction
<br />Contract.
<br />12.2. Construction Contract: The agreement between the Owner and the
<br />Contractor identified on the signature page, including all Contract
<br />Documents and changes thereto.
<br />12.3. Contractor Default: Failure of the Contractor, which has neither
<br />been remedied nor waived, to perform or otherwise to comply with
<br />the terms of the Construction Contract.
<br />12.4. Owner Default: Failure of the Owner, which has neither been
<br />remedied nor waived, to pay the Contractor as required by the
<br />Construction Contract or to perform and complete or comply with
<br />the other terms thereof.
<br />(FOR INFORMATION ONLY —Name, Address and Telephone)
<br />AGENT or BROKER: OWNER'S REPRESENTATIVE (Architect, Engineer or other party):
<br />00601 -2 03-4138.B
<br />EJCDC No. 1910 -28A (1984 Edition)
<br />Prepared through the joint efforts of the Surety Association of America, Engineers' Joint Contract Documents Committee, The Associated
<br />General Contractors of America, American Institute of Architects, American Subcontractors Association, and the Associated Specialty
<br />Contractors.
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