Updated September 7, 2026. This article addresses the AIA A312–2010 performance bond. Use the actual signed bond and amendments when evaluating a default or claim.
Read the triggering conditions together
Section 3 addresses notice of a possible contractor default, default and termination, and the remaining contract balance. Sending a general complaint does not necessarily satisfy the bond's requirements.
The prejudice exception is limited
Section 4 concerns failure to give the notice described in Section 3.1. It limits relief from the surety's obligations to demonstrated actual prejudice from that failure. It is not a blanket exception for every missed notice or other condition in the bond. AIA's official commentary and comparison explains the change from the 1984 form.
Address a surety's failure to act through the right procedure
Section 6 provides an additional demand and seven-day period when the surety has not proceeded with reasonable promptness under Section 5. A denial or a disputed payment offer is treated differently. Identify the surety's response before assuming the same demand procedure applies in every situation.
Calendar the time for proceedings separately
Section 11 generally measures its two-year period from the earliest of the listed events: a declaration of contractor default, the contractor ceasing work, or the surety's refusal or failure to perform. Review the complete clause and applicable law rather than counting only from the most recent denial letter.
Keep a complete record
Preserve the signed bond, contract, amendments, default notices, delivery receipts, payment ledger and communications with the surety. Before arranging completion work, assess how the proposed action affects the surety's contractual options and your rights.
Kushnick Pallaci PLLC handles construction contract and surety disputes. For a different issue—unpaid labor or materials—see our payment-bond claim guidance.
General information only. Bond language, governing law and project facts control.
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