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Bonds - and I'm not talking Barry!

Delivery_truck_2 You just purchased carpet from your favorite floor covering store and can't wait until you're walking barefoot on that plush carpet. You hired a contractor to install it - and got his business card from the wall of cards posted at the home improvement store.

The only problem now is that it's 2 p.m. and the contractor was supposed to be there at 8 a.m. to install the carpet. Where could he be?

It turns out, he never shows up and you don't have your carpet.

In my last post, I talked about contractors delivering carpet or appliances to your residence. This brings up a serious discussion about suretyship.

Surety bonds are used in a wide variety of circumstances, including public private and commercial situations.

The three C's of a contractor are Character, Capacity and Capital. Before a surety bond will be issued, the three C's are considered.

What type of contract bonds are there?

Bid bond - This is given by a bidder for supply or construction contract to guarantee that the bidder, if awarded the contract within the time stipulated, will enter into the contract and furnish the prescribed performance bond.

Peformance bond - This guarantees faithful peformance of the terms of a written contract for furnishing supplies or for construction.

Payment bond - A contractor gives this to guarantee payment for the labor and material used in the work which he is obligated to perform under the contract.

Maintenace bond - The normal coverage provided by a maintenance bond is a guarantee against defective workmanship or material.

Is it better to pay a little more for a job and know that it is going to be completed? Or do you want to take a chance and be completely without?

Check out the Surety Bond Blog for more details.

You'll find more information about Surety Bond programs here: Surety Bond Guarantee Program helps contractors grow.

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Comments

Great insights,Thanks for the terminologies that you include here to understand more about the different types of bond.I am not familiar with these,good thing I learn something here in your post.

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