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Payment Surety Bound By Joint Check Agreement Bonds-payment; Suppliers

Thursday, November 03, 2005 04:23 pm

Payment Surety Bound By Joint Check Agreement Bonds-payment; Suppliers

A Pennsylvania court has ruled that a joint check agreement not only obligated a prime contractor to a subcontractor's supplier, but also was binding against the prime's payment surety.

Ernest Bock and Sons, Inc., prime contractor on a New Jersey public works project, furnished payment and performance bonds issued by XL Specialty Insurance Co. Bock subcontracted the masonry work to Mastro Masonry Contractor. Mastro attempted to procure brick and other masonry materials for the project from Diener Brick Company.

Diener was concerned about Mastro's creditworthiness. In order to assure a supply of materials f [...]

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