§4812. Bond required; terms and conditions

A. To be entitled to the benefits of the provisions of R.S. 9:4802(C), every owner shall require a general contractor to furnish and maintain a bond of a solvent, legal surety for the work to be performed under the contract. The bond shall be attached to the notice of the contract when it is filed.

B. The amount of the bond shall not be less than the following amounts or percentages of the price of the work stipulated or estimated in the contract:

(1) If the price is not more than ten thousand dollars the amount of the bond shall be one hundred percent of the price.

(2) If the price is more than ten thousand dollars but not more than one hundred thousand dollars the amount of the bond shall be fifty percent of the price, but not less than ten thousand dollars.

(3) If the price is more than one hundred thousand dollars but not more than one million dollars the amount of the bond shall be thirty-three and one-third percent of the price, but not less than fifty thousand dollars.

(4) If the price is more than one million dollars the amount of the bond shall be twenty-five percent of the price, but not less than three hundred thirty-three thousand three hundred thirty-three dollars.

C. The condition of the bond shall be that the surety guarantees:

(1) To the owner and to all persons having a claim against the contractor, or to whom the contractor is conventionally liable for work done under the contract, the payment of their claims or of all amounts owed them arising out of the work performed under the contract to which it is attached or for which it is given.

(2) To the owner, the complete and timely performance of the contract unless such guarantee is expressly excluded by the terms of the bond.

D. The bond of a legal surety attached to and filed with the notice of contract of a general contractor shall be deemed to conform to the requirements of this part notwithstanding any provision of the bond to the contrary, but the surety shall not be bound for a sum in excess of the total amount expressed in the bond.

E. The bond given in compliance with this Part shall be deemed to include the following conditions:

(1) Extensions of time for the performance of the work shall not extinguish the obligation of the surety but the surety who has not consented to the extensions has the right of indemnification under the original terms of the contract as provided by Article 3057 of the Civil Code.

(2) No other amendment to the contract, or change or modification to the work, or impairment of the surety's rights of subrogation made without the surety's consent shall extinguish the obligations of the surety, but if the change or action is materially prejudicial to the surety, the surety shall be relieved of liability to the owner, and shall be indemnified by the owner, for any loss or damage suffered by the surety.

(3) A payment by the owner to the contractor before the time required by the contract shall not extinguish the obligation of the surety, but the surety shall be relieved of liability to the owner, and shall be indemnified by the owner for any loss or damage suffered by the surety.

Acts 1981, No. 724, §1, eff. Jan. 1, 1982.