Contractors today face a unique set of challenges when it comes to projects. Since time, labor, material and payments are at stake in contractor work, a surety bond may be necessary to ensure each party receives what they had signed up for on their agreement form.
1. Unpaid Services, Labor or Material
If a contractor walks away from a project without paying material suppliers, laborers or subcontractors, then the responsibility may fall solely upon the other party involved in the agreement. Instead of paying the difference, a surety bond in New Jersey can require by law that a contractor pay their share.
2. Disagreements to Contract Terms
A contractor may decide they dislike the pay they initially agreed upon or may refuse to perform certain tasks that were required when they signed the contract. To avoid either party being unpaid, a bid bond may ensure that the original pay agreement is paid only if the tasks are complete.
3. Failure to Perform the Contract
Some companies, property owners or businesses may experience a financial loss if a contractor incorrectly performs the project as specified in their terms. A performance surety bond in new jersey can hold the negligent party legally responsible for payment of labor or materials to fix their mistake.