"Payment Bond Form"

What Is a Payment Bond?

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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How to Make a Payment Bond Claim?

Here is what you need to do to obtain a Payment Bond and recover your funds if you were not paid in full or on time:

  1. Prepare a notice whether you worked on a private project or were hired to build state or county property. It will serve as the final warning - tell the recipient that if you do not receive the payment they owe you there will be harsh consequences for the breaching party. The contractor must receive the notice and have two or three weeks to respond to satisfy your demands or explain why they are inadmissible. Note that you should keep proof of sending in case you file a lawsuit later.
  2. If even after the notice the general contractor ignores you or continues to insist you are not entitled to payment, you can move with the bond claim. A copy of the claim - the document that confirms you did not get compensation for your labor and materials with supplemental materials that prove your contributions to the project - must be sent to the contractor, the surety that provided the bond, and the owner of the project.
  3. Start a legal action to recover payment if the bank, insurance company, or bond surety failed to act the way you asked them to in your claim. Make sure the bond has not expired and the surety is still under the obligation to release payment - the deadline may vary from state to state, from six months to two years. It will be in the interests of the contractor to take your side otherwise their bond history may be tarnished.

Still looking for a particular document? Take a look at the related templates below:

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Payment Bond Form
Bond Number: _______________________
KNOW ALL PERSONS BY THESE PRESENTS, that we, _______________________,
as principal, (hereinafter referred to as the “Principal”), and _______________________,
a _______________________, as surety, (hereinafter referred to as the “Surety”), are
held and firmly bound unto _______________________, as Obligee, and to all persons
who furnish labor or material directly to the Principal for use in the prosecution of the
work hereinafter named, in the maximum penal sum of $_______________________,
lawful money of the United States of America, for which payment well and truly to be
made we bind ourselves, our heirs, executors and assigns, jointly and severally, firmly by
these presents.
WHEREAS, the Principal has entered, or is about it enter, into a written agreement with
the Obligee, for _______________________ (hereinafter referred to as the “Contract”)
and more fully described in said Contract, said Contract is hereby referred to and made a
part hereof.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the
said Principal shall pay all persons who shall have furnished labor or material directly to
the Principal for use in the prosecution of the aforesaid work, each of which said persons
shall have a direct right of action on this instrument in their own name and for their own
benefit, subject, however, to the Obligee’s priority, then this obligation to be void;
otherwise to remain in full force and effect. Notwithstanding anything to the contrary in
the Contract, the Bond is subject to the following express conditions:
1. Whereas, the Obligee has agreed to accept this Bond, this Bond shall be effective
for the definite period of _____________________ to ______________________.
The Bond may be extended, at the sole option of the Surety, by continuation
certificate for additional periods from the expiry date hereof. However, neither:
a. The Surety’s decision not to issue a continuation certificate; nor
b. The failure or inability of the Principal to file a replacement bond or other
security in the event the Surety exercises its right to not renew this Bond,
shall itself constitute a loss to the Obligee recoverable under this Bond or
any extension thereof.
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Payment Bond Form
Bond Number: _______________________
KNOW ALL PERSONS BY THESE PRESENTS, that we, _______________________,
as principal, (hereinafter referred to as the “Principal”), and _______________________,
a _______________________, as surety, (hereinafter referred to as the “Surety”), are
held and firmly bound unto _______________________, as Obligee, and to all persons
who furnish labor or material directly to the Principal for use in the prosecution of the
work hereinafter named, in the maximum penal sum of $_______________________,
lawful money of the United States of America, for which payment well and truly to be
made we bind ourselves, our heirs, executors and assigns, jointly and severally, firmly by
these presents.
WHEREAS, the Principal has entered, or is about it enter, into a written agreement with
the Obligee, for _______________________ (hereinafter referred to as the “Contract”)
and more fully described in said Contract, said Contract is hereby referred to and made a
part hereof.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the
said Principal shall pay all persons who shall have furnished labor or material directly to
the Principal for use in the prosecution of the aforesaid work, each of which said persons
shall have a direct right of action on this instrument in their own name and for their own
benefit, subject, however, to the Obligee’s priority, then this obligation to be void;
otherwise to remain in full force and effect. Notwithstanding anything to the contrary in
the Contract, the Bond is subject to the following express conditions:
1. Whereas, the Obligee has agreed to accept this Bond, this Bond shall be effective
for the definite period of _____________________ to ______________________.
The Bond may be extended, at the sole option of the Surety, by continuation
certificate for additional periods from the expiry date hereof. However, neither:
a. The Surety’s decision not to issue a continuation certificate; nor
b. The failure or inability of the Principal to file a replacement bond or other
security in the event the Surety exercises its right to not renew this Bond,
shall itself constitute a loss to the Obligee recoverable under this Bond or
any extension thereof.
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TEMPLATEROLLER.COM
2. The above referenced Contract has a term ending _______________________ .
Regardless of the number of years this Bond is in force or the number of
continuation certificates issued, this Bond shall not be extended beyond
_______________________ , unless earlier nonrenewed pursuant to paragraph 1
above.
3. Regardless of the number of years this Bond is in force or the number of
continuation certificates issued, the liability of the Surety shall not be cumulative
in amounts from period to period and shall in no event exceed the amount set forth
above, or as amended by the rider.
4. Any notice, demand, certification, or request for payment, made under this Bond
shall be made in writing to the Surety at the address specified below. Any demand
or request for payment must be made prior to the expiry date of this Bond.
Surety Address: _____________________________________________________
__________________________________________________________________
5. No claim, action, suit or proceeding, except as hereinafter set forth, shall be had or
maintained against the Surety on this instrument unless such claim, action, suit or
proceeding is brought or instituted upon the Surety within one year from
termination or expiration of the bond term; or after the expiration of ninety (90)
days after the day on which any person last supplied the labor and/or materials for
which the claim is made, whichever occurs first. If this limitation is void or
prohibited by law, then the minimum period of limitation available to Surety as a
defense in the jurisdiction of the suit shall be applicable.
6. The amount of this Bond shall be reduced by and to the extent of any payment or
payments made in good faith hereunder.
7. If any conflict or inconsistency exists between the Surety’s obligations or
undertakings as described in this Bond and as described in the underlying
Contract, then the terms of this Bond shall prevail.
Signed and sealed this ____ day of ___________ 20___________.
_________________________________
_________________________________
Principal
Attorney-in-Fact
_________________________________
_________________________________
Signature
Signature
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