Performance and Labor Bonds Clause Samples
The Performance and Labor Bonds clause requires contractors to provide financial guarantees, typically in the form of bonds, to ensure the satisfactory completion of a project and the payment of laborers and suppliers. In practice, this means that before work begins, the contractor must secure bonds from a surety company, which will cover costs if the contractor fails to fulfill contractual obligations or pay workers. This clause primarily protects project owners from financial loss due to contractor default and ensures that all parties involved in the project are compensated, thereby reducing the risk of project delays or legal disputes.
Performance and Labor Bonds. Concurrently with execution of this Agreement Contractor shall deliver to the City, the following:
(a) A performance bond in the amount of the Contract Sum of this Agreement, in the form provided by the City Clerk, which secures the faithful performance of this Agreement.
(b) A labor and materials bond in the amount of the Contract Sum of this Agreement, in the form provided by the City Clerk, which secures the payment of all persons furnishing labor and/or materials in connection with the work under this Agreement. Both the performance and labors bonds required under this Section 5.4 shall contain the original notarized signature of an authorized officer of the surety and affixed thereto shall be a certified and current copy of his power of attorney. The bond shall be unconditional and remain in force during the entire term of the Agreement and shall be null and void only if the Contractor promptly and faithfully performs all terms and conditions of this Agreement and pays all labor and materials for work and services under this Agreement.
Performance and Labor Bonds. CONTRACTOR shall, prior to the execution of the contract, furnish two bonds in a form approved by the CITY, one in the amount of One Hundred Percent (100%) of the contract price to guarantee the faithful performance of the work, and one in the amount of One Hundred Percent (100%) of the contract price to guarantee payment of all claims for labor and materials furnished. This contract shall not become effective until such bonds are supplied to and approved by the CITY.
Performance and Labor Bonds. Concurrently with execution of this Agreement Contractor shall deliver to the City, the following in the form required under the Contract Documents or otherwise by the City Clerk:
(a) A performance bond in the amount of the Contract Sum of this Agreement, which secures the faithful performance of this Agreement (“Performance Bond”).
(b) A labor and materials bond in the amount of the Contract Sum of this Agreement, which secures the payment of all persons furnishing labor and/or materials in connection with the work under this Agreement (“Payment Bond”).
(c) A warranty bond, guaranteeing the Contractor’s warranty under Section 1.11 of this Agreement, in an amount not less than 100% of the Contract Sum. The bonds shall contain the original notarized signature of an authorized officer of the surety and affixed thereto shall be a certified and current copy of his/her power of attorney. The bonds shall be unconditional and remain in force during the entire term of this Agreement. City shall release the Performance Bond and Payment Bond when the following have occurred: (a) Contractor has made a written request for release and provided evidence of satisfaction of all other requirements under Article 5 of this Agreement, (b) the work for the Project has be finally accepted by the City, and (c) after passage of the time within which lien claims are required to be made pursuant to applicable laws; if lien claims have been timely filed, City shall hold the Payment Bond until such claims have been resolved, Contractor has provided statutory bond, or otherwise as required by applicable law.