Legal Blog:

Bonds

My word is my bond. That expression may have had meaning in the distant past, but certainly has no validity in the construction bonding industry. All bonding agreements require the contractor to indemnify the surety, many require the contractor’s principals to indemnify the surety, and some require the principals or the contractor to post security (e.g. cash, mortgages on land, the first-born child etc.). However, like all other agreements (no matter how one-sided the wording), there is always room for disagreement. We discuss two recent cases: Western Surety Co. v. Hancon Holdings Ltd., a 2007 British Columbia Supreme Court decision, and Stratton Electric Ltd. v. Guarantee Company of North America, a 2006 Ontario Superior Court of Justice decision.

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