Civil Engineering Reference
In-Depth Information
Performance bonds have dates on which they expire, after which the surety's liability to
the employer is ended. Commonly, such dates might be practical completion or, increas-
ingly, the date of issue of a certificate of making good defects. Contractors often write to
employersaskingthemto'release'thebond.Whattheymeanisthattheywishtheemploy-
er to confirm that the surety's liability is ended. This is important to the contractor because
thecontractor'sliability tothesuretyendswhenthesurety'sliability comestoanend.This
can be very important to a contractor who has obtained a surety from its bank. In such cir-
cumstances, a bank will often reduce the contractor's potential overdraft by the amount of
the bond until the bond is released (or it expires).
