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In construction, contractors, both general contractors and subcontractors alike are sometimes required to post performance bonds that require the contractor to purchase essentially an insurance policy that will provide payment in the event that a contractor fails to pay under the terms of the payment bond policy.

These payment bonds are generally required on federal, state, and local construction projects because government properties are immune from the filing of a materialman's lien. However, larger construction projects and other various circumstances may arise that require the purchase of a payment bond.

The construction lawyers at Panessa & Associates, LLC can help the contractor understand his/her rights and negotiate key terms of payment bonds before entering into such an agreement. While it is the nature of construction to want to land that big construction contract, sometimes it may not be worth the risk and it is much better to find this out on the front end before you enter into a contract than after you have already entered into the detrimental construction contract. Payment bonds inevitably require that someone personally guarantees the payment bonds. However, for instance, these insurance companies will want your wife and children to sign if you allow them and contractors should seriously consider hiring a construction lawyer before entering into a payment bond.

A significant part of the construction litigation practice at Panessa & Assocates consists of collecting on payment bonds. If you are a contractor and have not been paid on a job where a payment bond has been obtained by the contractor responsible for payment, it is imperative that you take action in a timely manner to ensure that you preserve your rights to collect on a pyament bond. Your ability to collect on a payment bond may be affected by the Miller Act if it is a federal construction project and by what is known in Georgia as the Little Miller Act if your construction project is a state project. There are certain notice requirements and the time required to bring a claim can be drastically reduced depending on the type action involved.

The construction lawyers at Panessa & Associates, LLC are happy to provide you with a free consultation as it relates to construction law and payment bonds.