BOND BY CONTRACTOR IN FAVOUR OF OWNER FOR CONSTRUCTION OF BUILDING
KNOW ALL MEN by these presents:
That we ______________ (here insert the name and address of legal title of the Contractor,) Principal, and ___________ (here insert the name and address or legal title of Surety) Surety, are held and firmly bound unto.:.(here insert the name and address or legal title of the Owner), Owner, in the sum of Rs. ___________ for the payment of which we bind ourselves, our legal representatives, successors and assigns, jointly and severally, firmly by these presents.
WHEREAS, Principal has executed contract with Owner, dated _____ for ________ copy of which contract is by reference made a part hereof.
- if Principal shall faithfully perform such contract and pay all persons who have furnished labour or materials, for use in or about the improvement and shall indemnify and save harmless the Owner from all cost and damage by reason of Principal’s failure so to do, then this obligation shall be null and void; otherwise it shall remain in full force and effect.
- All persons who have furnished labour or materials for use in or about the improvement shall have a direct right of action under the Bond, subject to the owner’s priority. The contract, including the completion thereof after default, if any, shall be prosecuted under full supervision of a duly qualified Architect.
- Any payment or payments under the bond shall reduce its penalty to the extent of such payment or payments.
- No suit or action may be maintained under the Bond unless it shall have been instituted within two years from the date on which final payment under the contract falls due.
- The Owner and Architect shall co-operate with and assist Surety in prosecuting its rights and claims, if any, against Principal and others by supplying testimony, books, records and documentary evidence in their possession.
- The Surety hereby waives notice of any alteration, extension or forbearance made or extended by the Owner or Principal.
- In the event Principal is in default under the contract as defined herein, Surety will (a) within fifteen (15) days of determination of such default, take over and assume completion of said contract and become entitled to the payment of the balance of the contract price, or (b) pay the owner in cash the reasonable cost of completion, less the balance of the contract price including retained percentage. The cost of completion shall be fixed by taking bids from at least three responsible contractors, one chosen by the Owner, one by the architect and one by the surety. The Surety will make such payment within fifteen (15) days after the cost of completion shall have been so determined.
PROVIDED HOWEVER, that unless the aforesaid contract is executed it is hereby stipulated and agreed that this Bond is executed and delivered upon the condition that all disputes, claims or questions arising under such contract shall be subject to arbitration in accordance with the provisions of the General Conditions of the contract for the construction of buildings contained in the said contract, notwithstanding anything done to the contrary contained in such contract.
IN WITNESS etc.
SIGNED, SEALED AND DELIVERED In the presence of: