By Bill Blancato, special to North Carolina Construction News. There is an old adage: “Never say never.” This is usually good advice, but when. Although there are several changes to the bond form that can be reviewed on the AIA’s website (Click Here for A Comparison Document), one modification. This document was electronically produced with permission of the AIA and Electronic Format A 1. AIA Document A – Electronic Format.

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Parties intending to use ais standard form payment bond should note the procedural differences for making a claim between the AIA and ConsensusDocs forms. The default procedures under A are simpler than those of A When it issues a payment bond, a surety agrees to cover the risk that a contractor will fail to pay its subcontractors, laborers, or suppliers with proper claims for unpaid labor and material.

The procedures for making a claim under standard form bonds differ by the type of bond and the promulgating association. Some sureties seek use of alternative payment bond forms such as A If using A, the owner need not request a meeting if it provides notice of potential default aoa the contractor and surety. Under A, the owner must, within 15 days, request zia attempt to arrange a meeting with the contractor and surety to see if an agreement can be reached on future performance.

Subscribe to the HLG Newsletter! To make this website work, we log user data and share it with processors. Aiw the Issue Construction Unemployment Falls to 9. The AIA A performance bond is the predecessor to A and is still used on construction projects.

Procedural Differences for Claims on Standard Form Performance and Payment Bonds

The following article discusses the procedure for making claims on these aja bonds on private projects and many public works projects. An untimely or non-response has harsh consequences for principal and surety alike! This form contains similar provisions to the AIA A, but with more modern language. A has been used as an industry standard bond form since its release more than 25 years ago, with no changes made until the revised form A was published in June Mayo vCard Associate Atlanta, Georgia.


In sum, these changes to A counsel in favor of closely reviewing any performance bonds used on a given project to ensure s312 both Contractor and Surety performance is properly secured.

A contractor may also demand performance and payment bonds from its subcontractors. In Stoningtonthe owner complied with the notice and pre-default meeting procedures, but it failed to correctly declare the contractor in default when reasons arose, failed to formally terminate the contractor in accordance with the incorporated terms of the construction contract, and improperly selected its own replacement contractor without consulting the surety. Provides in the payment bond that the Surety shall defend, indemnify and hold harmless the Owner against any liens, claims, suits or demands.

Many sureties have created their own custom modifications to the A payment bond form; the language and approach of such modifications vary among surety companies. With the official retirement of the version, some reflection on the differences between the old and new forms is justified. Some sureties may write an unmodified A bond form, but only for particular accounts.

Planning, Design and Construction

However, as future litigation crops up out of this language of the new bond, it is likely that a surety will not be penalized as harshly as the sureties in National Union for the failure to provide a timely answer to a payment bond claim. What is a Letter of Intent?

Another important difference between A and A is that A does not require the owner to agree to pay the balance of the contract price to the surety. Under the revised version of A, the process by which an Owner or other obligee can declare a non-performing Contractor or other principal in default has been significantly streamlined. The conditions to make a claim under ConsensusDocs require the owner to: Web Design by G3 Group. Enumerates the information that must be included in a claim against the payment bond, which includes: The process for determining the procedural requirements of a specific bond should involve a detailed examination of the bond, with focus on the obligations imposed on the parties, as well as a comparison of the bond language against the minimum requirements in applicable federal, state, or municipal statutes.


Registration Forgot your password? InConsensusDocs published a new standard form performance bond, ConsensusDocs Surety industry provided comments and input in the development of the forms but is not the publisher of the forms.

The owner also must not be in default under the contract. Each surety company will make its own decision on whether and how to write the Aa payment bond form. Cooperate with your bond producer and surety on any payment bond claims under A and provide all relevant information to the surety as promptly as possible. Feedback Privacy Policy Feedback. First, the owner must notify the contractor and surety a32 it is considering declaring the contractor in default.

The approach taken by the Court of Appeals of Maryland in National Union quickly took hold, and other states like Virginia and Florida a32 suit.

Home – AIA Bond Forms

How can the a321 make a proper determination as to the merits of the claim and the range of appropriate defenses in the absence of relevant facts and documentation? These a32 form payment bonds also contain different procedural requirements for pursuing a claim. If you wish to download it, please recommend it to your friends in any social system. Whether or not a business relies on the AIA bond forms, another vendor, or its own internal forms, it is critical to understand and appreciate the legal force and effect of the forms selected.

Like all performance bonds, whether standardized or not, the terms of A define performance required by the parties. Principal must provide the surety with all claim information promptly and expeditiously!