Prequalification of Contractors - Surety Bonds
Pre Qualified Contractors
Principal’s skills are verified by the surety company before the issuance
of surety to the obligator. Before the issuance of the surety to the contractor,
the surety company verify that the contractor satisfy all requirements of the
contract. The surety will be in a position to undergone the risk, In default
of the contractor. The surety has to undertake the performance or the payment
of the obligee in failure of the contract. In such a situation, the surety pre
qualify the requirements of the contractor in a thorough and rigorous manner
and also see to that, the contractor will satisfy the needs of the surety. This
prequalification is rigorous process.
The contractor is required to satisfy the following requirements.
• He should have the ability to meet the obligation of the contract.
• He should ensure the obligee, that he will give a faithful performance
of the contract.
• He should procure good reference and reputation in the market regarding
his contract business.
• He should have proper financial capability regarding his economic soundness.
• Has per the assurance he has to fulfill the performance of the contract.
• His book should show financial soundness of the company for the past
Bonds play a major role in today’s market. Bonds become more essential
in construction industry for completion of their construction projects. Underwriting
bonds involve great risk. But the surety company will write these bonds for
the benefit of their customers. If bonds have been underwritten it has following
• The obligee gets a guaranteed performance of the contract from the
principal and the surety.
• These bonds enforce the contractor to complete the contract with in
the stipulated time and contract money.
• This bond guarantees the payment from the obligee to the contractor
and also from the principal to the subcontractor.
• This bond ensures that the supplier will furnish the material and labor
to the principal as signed in the contract.
• In default of the contract, the obligee can sue the principal i.e. the
obligator and the also the surety.
• The obligee can enforce the surety to complete the contract with in
the stipulated time and contract money in failure of the principal for completion.
• The underwriter of the surety company can provide financial, technical
assistance to the contractor.
A contractor is a person who undertakes the risk of completion of contract with
in stipulated time and contract price. The contractor performs a contract for
a price consideration. The contractor guarantees the owner that he will finish
the contract with in stipulated time and contract value, through issuance of
the bond. In default of the contractor, the obligee will sue him against the
court of law. This bond ensures the contractor’s guaranteed performance
of the contract.
An oblige is a person who receives the benefit of the surety bond. The obligee
is said to be the owner of the contract and he receives the performance of the
contractor. The obligee makes payment to the contractor for completion of contract.
In failure of the contract, the obligee can sue the principal and the surety
against claims. The owner can ask the surety to complete the contract, if principal
failed in his performance.
A surety is a guarantor for the performance of the principal against the contract.
The surety undertakes the risk by guaranting against the principal. The surety
enforces the contractor to perform the contract, in failure of the principal.
The obligee can sue the surety for the failure of the principal’s performance.
Related Tags: license and permit bonds, surety bonds, contractors license bond, contract bond, performance bonds
Ron Victor is a SEO copywriter for Surety Bond Company . He written many articles in Contract Surety Bonds and Auto Dealer Bond topics. For more information visit Customs Bond . Contact him at email@example.comYour Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as
- The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru
- The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of
- Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta
- Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider
- How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take
- How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom
- Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo
- How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb
- Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo
- Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit
- The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla
- Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs
- Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume
- Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look
- Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi
- What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon
- Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter
- Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are