I. A performance and payment bond is Issued. Who issues the bond? A. Surety B. P

Question

I. A performance and payment bond is Issued. Who issues the bond? A. Surety B. Principal C. Obligee D. Beneficlary 2. A performance and payment bond is issued. Who is obligated under the bond (aside from the issuer)? A. Surety B. Principal C. Obligee D. Beneficiary 3. A performance and payment bond is issued. The owner can be classified as the? A. Surety B. Principal C. Obligor D. Beneficiary 4. The contractor defaults and cannot complete the project. The surety pays several subcontractors that were not paid. Can the surety sue the contractor? 5. Referring to the previous question, could the surety sue the owner if the owner improperly held payments that caused the contractor to default? 6. A contract is for 2.5 million dollars. $300.000 in change orders were made. After completing half the project the contractor has been paid $1.8 million. The contractor defaults. How much is the surety liable for? Who can the surety collect from? 7. A developer plans to put in a 30 lot subdivision. There are six lots on the existing public road. The remaining lots are on internal streets the developer must build. The cost of the internal streets is estimated to be $120,000. Subdivision approval ordinarily requires all streets to be built. No lots can be sold without subdivision approval. Each lot is estimated to cost $30,000. What can the develop do to avoid spending any of her money? What would a honding company requirel

Explanation / Answer

1) Option A is correct. Surety issues the bond and backs it.

2) Option B is correct. principal is obligated under the project.

3) Option C is correct. Owner is obligor.

4) Yes. Legally, surety pays to obligee and surety can sue the contractor.

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