did not apply for bond

[lokidowski]

What is the worst case scenario if I signed a contract agreeing to execute a performance bond but never bothered to do so?

[Admin]

That all depends...

I would consult your attorney for details in this matter. You can feel free to post the specifics, but it will be hard to accurately answer you without more information.

[srotap]

Not being a lawyer, I can't say what all the legal issues are but one thing occurs to me. I will assume that you are the party that is to perform a service and the other party in the contract is paying you for that service. Seems to me that the other party could wait till you performed the service and when it comes time to pay, ask you to produce proof of the bond. If you can't produce it and the contract requires it, it sounds to me as if you have not met the requirements of the contract and they could make a case for not paying you. You asked for "worst case". If they have a good lawyer and you don't, the worst case would be that you do all the work and don't get payed.

[Admin]

Typically, work can not be started until the bond is posted to avoid those types of situations. However, that is not to say it doesn't happen from time to time.

We have had many phone calls over the years of contractors trying to get a bond they do not qualify for after work is well under way. Sometimes they qualify, but bonding companies do not want to touch contracts that needed to be bonded mid-way, as they usually suspect something is already wrong and the obligee is simply requesting the bond to pay out on their problem.


In other words, if you have a bond requirement, make sure you fullfil it prior to starting any work!

Also, contact your attorney to see what the next step is for you.