Home>Levelset Community>Legal Help>Which bond do we move against as a supplier, where both the general and subcontractor are bonded

Which bond do we move against as a supplier, where both the general and subcontractor are bonded

Customer suddenly closed their doors and we contacted the general contractor about payment. The general contractor had been properly notified per State of Washington commercial law. General contractor required our customer, their subcontractor, to also bond the job and subcontractor bond shows the general contractor as the oblige. Normally we would file a bond claim against the general contractor payment bond but general contractor is telling us to go after subcontractor bonding company for payment. Which bond do we pursue?

1 reply

Jan 25, 2018

This is a great question. A sub-subcontractor will be able to make a bond claim against whichever bond was issued in their favor for their payment claims. If the hiring subcontractor has posted a payment bond, that subcontractor's subs would be able to make a claim on that bond. Assuming this is a public project, subcontractors, sub-subcontractors, and laborers or material suppliers to the general contractor or first-tier subcontractors are protected by the GC's bond. However, if both the GC and the subcontractor's bonds are issued for the benefit of all claimants (or at least the claims of persons at the sub-sub or sub-supplier tier), it would seem that a claimant who's contracted with a subcontractor might have the option of which bond to file against - either the GC or their hiring sub. If deciding which bond to pursue is truly up to the claimant, some deciding factors on which bond to choose might be the relationship between the parties or the reputation of the party who posted their bond (or the reputation of their surety). Of course, making a claim against both bonds may also be an available option, as well. If this is a bonded private project, the ability to recover from either the GC or the Sub's bond may come down to the terms of the bond.

0 people found this helpful

Helpful