Legal Resources | | CV 3248
Divistion 3 Obligations. Part 4 Obligations Arising From A Particular Transaction. Payment bond.
Chapter 7 Payment Bond For Public Works.
In order to be approved the payment bond shall satisfy all of the following requirements:
(a) The bond shall be in a sum not less than that prescribed in the following paragraph which is applicable to the total amount payable:
(1) One hundred percent of the total amount payable by the terms of the contract when the total amount payable does not equal or exceed five million dollars ($5,000,000).
(2) Fifty percent of the total amount payable by the terms of the contract when the total amount payable is not less than five million dollars ($5,000,000) and does not exceed ten million dollars ($10,000,000).
(3) Twenty-Five percent of the total amount payable by the terms of the contract if the contract exceeds ten million dollars (10,000,000).
(b) The bond shall provide that if the original contractor or subcontractor fails to pay any of the persons named in Section 3181, or amounts due under the Unemployment Insurance Code with respect to work or labor performed under the contract, or for any amounts required to be deducted, withheld, and paid over to employment Development Department from the wages of employees of the contractor and subcontractors pursuant to Section 13020 of the Unemployment Insurance Code, with respect to such work and labor that the sureties will pay for the same, and also, incase suit is brought upon the bond, a reasonable attorney's fee, to be fixed by the court. The original contractor may require of the subcontractors a bond to idemnify the original contractor because of any default by the subcontractors under this section.
(c) The bond shall, by its terms inure to the benefit of any of the persons named in Section 3181 so as to give a right of action to such persons or their assigns in any suit brought upon the bond.
(d) The bond shall, be in the form of a bond and not a deposit in lieu of a bond.
(Amended by Stats. 1998, Ch. 857, Sec. 1.)