A Payment Bond is a legal instrument signed to protect the interests of subcontractors and suppliers that work on a specific project. This document will guarantee payment to all individuals and corporations that participate in the construction project even if the prime contractor fails to meet their obligations listed in the bond and the contract with the customer. Signed after the parties to the construction job have agreed upon the terms and conditions of the agreement, the Payment Bond form offers security for all people who provide their labor and materials for the proposed project.
A Payment Bond template can be downloaded below. Typically, this document identifies all the parties by their names and addresses, contains a brief description of the private or public construction project, certifies the right of any subcontractor to file a claim if they did not receive payment from the contractor, states the duration of the bond, specifies whether it can be extended and which circumstances would lead to the extension, and establishes the prevalence of the bond over other agreements filled out in relation to the project.
If the project in question is a public building, construction of infrastructure for the benefit of the general public, or improvement of an existing public property, complete GSA Standard Form 25A, Payment Bond, instead.
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