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Bonds are another way to recover in a construction fight

On Behalf of | Jun 22, 2020 | Construction |

Even relatively modest construction projects are very complicated financial and legal affairs.

Deals have to be made between the developers and general contractors. Likewise, contractors also have to negotiate deals with their subcontractors.

One of the key issues in any construction project is whether those who agreed to do work will actually perform it and perform it well.

On the flip side, those in the Naples construction market also have to make sure that the developer will pay the contractor for the work when it is complete, and that the contractor will likewise pay their subcontractors who handled the various parts of the job.

Bonds, which are commonly used in the construction business, serve as an additional way to make sure that companies uphold their bargain.

Typically, a subcontractor or contractor will have to give a bond, a formal document, to the next company up the chain, be it the contractor or the developer of the project.

The bond is a legal document which provides that the company which issued the bond, oftentimes an insurance company or other financial institution, will either make things right or pay up to a certain amount if, for example, the contractor fails either to do the work promised or to pay off subcontractors.

For those in the middle of a construction suit, a bond can be a useful way of recovering losses that otherwise would be difficult to recoup.

For example, if the reason a contractor or subcontractor does not complete work is because of financial problems, then the only source of money may be the financial institution which issued a bond.

Litigation involving bonds can be complicated, however, which is why it is often best for a Florida individual or firm to consult with an experienced construction attorney in order to understand their options.