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Complaints Are Not Declaration Of Default Termination-default; Notice

Friday, September 03, 2004 02:44 pm

 
Complaints Are Not Declaration Of Default Termination-default; Notice

A federal appeals court has ruled that a prime contractor could not recover against a subcontractor's performance bond because repeated complaints did not suffice as a declaration of default.

Elm Haven Construction, prime contractor on a municipal street and utility project in New Haven, Connecticut, subcontracted a portion of the work to Neri Construction. The subcontractor furnished payment and performance bonds issued by U.S. Fidelity and Guaranty Company.

The performance bond obligations of USF&G were triggered if Elm Haven declared Neri to be "in default." Elm Haven started sending [...]

 
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