Title: Surety bonds and sureties in the construction industry
Description: The concept of suretyship is an old one. The Bible, the Code of Hammurabi, and the Magna Carta contain many pertinent references to suretyship. Solomon warns in the Book of Proverbs, 'he that is surety for a stranger shall smart for it.' The leading issue in Shakespeare's Merchant of Venice was the contract of suretyship entered into by Antonio and Shylock. Shylock was to take a pound of Antonio's flesh if Antonio's friend, Bassanio, was unable to pay his obligation to Shylock. Suretyship has far reaching applications in business and commerce today, particularly in the construction industry. Surety bonds play a major role in allocating particular risks within the tangled web of parties to a construction project. Sureties guarantee the construction contractor will meet its contract obligations, but a construction project owner may find getting the surety to act on its guarantee is not often an easy chore. Technical defenses which rely on an overlap of commercial and surety law make are often used successfully by sureties to minimize their losses.
Subjects: Surety and fidelity insurance, Construction industry, Insurance
Places: United States