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Failure To Declare Default Prevents Bond Recovery Termination-default; Notice; Bonds-performance

Tuesday, December 02, 2003 06:05 pm

 
Failure To Declare Default Prevents Bond Recovery Termination-default; Notice; Bonds-performance

A federal court has ruled that a prime contractor's failure to formally declare a default precluded recovery against a subcontractor's performance bond. Repeated threats and complaints did not trigger the bond obligation.

Elm Haven Construction was the prime contractor on a municipal street and utility project in New Haven, Connecticut. Elm Haven subcontracted a portion of the work to Neri Construction. Neri furnished payment and performance bonds issued by United States Fidelity and Guaranty Co.

Elm Haven became dissatisfied with both the pace and the quality of Ne [...]

 
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