AIA Document A312–2010 incorporates two bonds—one covering the contractor’s performance, and the other covering the contractor’s obligations to pay subcontractors and others for material and labor. In addition, AIA Document A312–2010 obligates the surety to act responsively to the owner’s requests for discussions aimed at anticipating or preventing a contractor’s default. For all document details and a record of changes, see the summary »
General. These instructions apply equally to the Performance Bond and to the Payment Bond. Both bonds require identical information on them, but each bond must be executed separately. Even though AIA Document A312 contains both bonds, they are still very separate bonds. The completion of one bond (e.g., the Performance Bond) is not sufficient to bind the parties to the other (e.g., the Payment Bond). Users should be careful not to mix one bond with the other. A common mistake is to fill in the cover page of the Performance Bond and to sign the signature page of the Payment Bond. In such a case, it is likely that neither bond will become binding.
Cover Page of Each Bond
Parties. The Contractor and Surety should be identified, along with the Owner, the Owner’s Representative, and the Agent or Broker. It is especially important that the Contractor and Surety be identified by using their full legal names and addresses, including the legal status of the parties: sole proprietorship, general partnership, joint venture, unincorporated association, limited partnership, corporation (general or professional), etc. The identification of the Owner’s Representative and the Agent or Broker is for information only, since they are not parties to the bond agreement.
Construction Contract. The Construction Contract should be described by date and amount and by the official name and location of the Project as used in the Construction Contract. The amount of the Construction Contract should be in both written and numerical form.
Bond Amount. The dollar amount of the bond should be in both written and numerical form. Frequently, each bond (the Performance Bond and Payment Bond) will be written to equal individually 100 percent of the Construction Contract Amount.
Bond Date. This date should not be earlier than the date of the Construction Contract which is adopted by reference.
Executing the bond.
Each bond must be separately signed by the Contractor and the Surety on the cover page of each bond. Additional space is provided on the last page of each bond for the signatures of additional parties. The parties executing (signing) the bond should indicate their company, print their name and title, and impress the corporate seal, if any. Where appropriate, attach a copy of the resolution or bylaw authorizing the individual to act on behalf of the firm or entity. Evidence of authority to sign on behalf of each party should be obtained. As to the Surety, this usually takes the form of a power of attorney issued by the surety company to the agent who signs on its behalf.
Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.
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