Experienced Kansas City Construction Law Firm
Call Our Team Today
1-800-523-5786

Surety bonds can serve a valuable purpose

As many contractors in Kansas have already learned, purchasing a surety bond is a requirement for most publicly contracted construction projects. It is a means for inoculating the project against the any vagaries and failures related to its contractors, and it is so effective at ensuring the completion of the project as outlined in the contract that an increasing number of private construction projects require a surety bond too.

Moreover, the bond involves a mutually and legally binding agreement among three parties, the principal, the obligee and the surety. The principal is the party assigned the work, such as individual contractors or a large construction company, as well as the party required to buy the bond. The obligee is the project owner who awards the contract for the work and who requires the bond. The surety is the insurance company that provides the bond. It is the surety company's responsibility, in the event that the principal fails to produce the work outlined in the contract, to employ a new principal to complete the contracted project or to compensate the obligee for financial losses.

Surety bonds may be varied to protect other essential elements contained within a contract, including payment to subcontractors and workers. Because the successful completion of large developments rely on numerous independent parties with specialized functions, the prospect of the entire project collapsing on the failure of one of its pieces is too great for an obligee to accept without this kind of insurance.

Those affected by surety bonds often rely the counsel of business attorneys who are well versed in contract law. These attorneys may critically review the project contract to make sure the terms are practical, reasonable and fair from the perspective of the party they represent.

Source: SBA.gov, "What is a Surety Bond?", December 23, 2014

No Comments

Leave a comment
Comment Information

Our condo association was faced with monumental construction issues thanks to the original developer of our complex. We were cash poor and in no position to get legal representation without a contingency fee arrangement. Luckily for us, Scott Long and Burke Robinson were willing to take us on as clients. Their work ethic, professionalism and knowledge of condominium construction served our association very well. Any association would be well served in hiring these gentlemen to represent them.

Board of Directors - Plaza Gardens on the Lake Condominium Owners’ Association Lake of the Ozarks, MO

Read More Testimonials

Let Us Help You

Contact our Kansas City Construction Law Firm by calling 1-800-523-5786 or by completing this contact form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy