The basic concepts and distinctions of suretyship and indemnification are reviewed, and public policy regarding contractor's bonds, contractor bonding in Federal construction contracts, and State laws and regulations relating to contractor bonds are examined. Current practices relating to suretyship and indemnification agreements covering performance and payment by the contractor are responsible to needs for special protection, in one case, of the public (or its contracting agency), and, in the other case, of laborers, material-men, and subcontractors. Most surety bonding is performed by a system of corporate surety organizations, many of which carry on their business nationwide. Most State legislation setting forth requirements for these arrangements has developed subsequent to passage of the Miller Act which prescribed bonding requirements for federal construction contracts. However, substantial variation exists in details of procedure for perfecting claims entitled to statutory protection. Although the continuing experience of Federal and State governments under the public contract bonding laws has led to increasing the assurance of performance and payments, there has been no corresponding parallel increase in the protection of the surety's position.

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Filing Info

  • Accession Number: 00178349
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Sep 14 1978 12:00AM