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1 The Contractor and the Surety, jointly and severally, which it may be liable to the Owner and, as
<br /> bind themselves, their heirs, executors, administrators, soon as practicable after the amount is deter-
<br /> successors and assi;ns to the Owner for the performance mined, tender payment therefor to the
<br /> of the Construction Contract,which is incorporated herein Owner; or
<br /> by reference.
<br /> Z Deny liability in whole or in part and notify the �
<br /> 2 If che Contractor performs the Construction Contract, Owner citing reasons therefor. '
<br /> the Surety and the Contractor shall have no obligation '
<br /> under this Bond, except to participate in conferences as � �f the Surety does not proceed as provided in Paragraph
<br /> provided in Subparagraph 3.1. -�with reasonabie promptness,the Surety shall be deemed
<br /> to be in default on this Bond fii-teen days after receipt of an
<br /> 3 li there is no Owner Default, the Surety's obiigation additional written notice from the Owner to the Surety
<br /> under this Bond shall arise atter: demanding that the Surery perrorm its obligations under
<br /> 3.1 The Owner has notified the Contractor and the this Bond, and the Owner shall be entitled to enrorce any
<br /> Surety at its address described in Paragraph 10 below remedy availabie to the Owner. If the Surety proceeds as
<br /> that the Owner is considering declaring a Contractor Provided in Subparagraph 4.-�,and the Owner refuses the
<br /> Default and has requested and attempted to arrange a Payment tendered or the Surety has denied liability, in
<br /> whole or in part,without rurther notice the Owner shall be
<br /> conrerence with the Contractor and the Surety to be entitled to enforce any remedy available to the Owner.
<br /> heid not later than firteen days after receipt of such
<br /> notice to discuss methods of performing the Construc- 6 After the Owner has terminated the Contractor's right
<br /> tion Contract. If the Owner, the Contractor and the to complete the Construction Contract, and if the Surety
<br /> Surety agree, the Contractor;hall be a(lowed a reason- elects to act under Subparagraph �.1, 4.2, or �.3 above,
<br /> able time to periorm the Construction Contrac', but then the responsibilities of the Surety to the Owner shall
<br /> such an agreement shall not waive the Owner's right, if not be greater than those of the Contractor under the
<br /> any, subsequently to declare a Contractor Default: and Construction Contract, and the responsibilities of the
<br /> 3.2 The Owner has declared a Contractor Default and �'^'ner to the Surety shall not be greater than those of the
<br /> formally terminated the Contractor's right to complete Owner under the Construction Contract.To the limit or the
<br /> the contract. Such Contractor Default shall not be de- amount of this Bond, but subjecc to commitment by the
<br /> clared earlier than twenty days arter the Contractor and ��vner of the Balance of the Contract Price to mitigation or
<br /> ihe Surety have received notice as provided in Sub- costs and damages on the Construction Contract,the Sure-
<br /> paragraph 3.1; and tv is obligated without duplication for:
<br /> 3.3 The Owner has agreed to pay the Balance or the 6.1 The responsibifities o�the Contractor for correc-
<br /> ;ion or defective work and comoletion or the Construc-
<br /> Contract Price to the Surety in accordance with the t�o� Contract;
<br /> terms or the Construction Contract or to a contractor
<br /> selected to perform the Construction Contract in accor- 6.2 Additional legal, desi;n professional and delay
<br /> dance with the terms of the contract with the Owner. costs resulting from the Contractor's Derault, and re-
<br /> sulting from the actions or tailure to act of the Surety
<br /> 4 When the Owner has satisfied the conditions of Para- under Paragraph 4; and
<br /> graph 3, the Suretv shall promptiv and at the 5urety's ex-
<br /> pense take one of�the following actions: 6.3 Liquidated damages, or ir no liquidated damages
<br /> 4.1 Arrange for the Contractor, with consent of the are specified in the Construc:ion Contract, actual dam-
<br /> ages caused by delayed performance or non-perfor-
<br /> O�vner, to perform and complete the Construction mance of the Contractor.
<br /> Contract; or
<br /> � 7 The Surety shall not be liable to the Owner or others for
<br /> 4._ Undertake to perform and complete the Construc- obligations of the Contractor chat are unrelated to the Con-
<br /> tion Contract itself, through its agents or through inde- struction Contract, and the Balance of the Contract Price
<br /> pendent contractors; or sha(I not be reduced or set orr on account of any such
<br /> 4.3 Obtain bids or negotiated proposals rrom unrefated obligations. No ri;ht or action shall accrue on
<br /> quali�ied contractors acceptable to the Owner for a this Bond to any person or entity other than the Owner or
<br /> contract for performance and completion of the Con- its heirs, executors, administrators or successors.
<br /> struction Contract, arrange for a contract to be pre- g The Surety hereby waives notice of any change, includ-
<br /> pared for execution by the O�vner and the contractor ing changes ot time, to the Construction Contract or to
<br /> selected with the Owner's concurrence, to be secured related subcontracts, purchase orders and other obli�a-
<br /> �vith performance and payment bonds executed by a tions. b
<br /> qualiried surety equivalent to the bonds issued on the
<br /> Construction Contract, and pav to the Owner the g Any proceeding, le�al or equitable, under this Bond
<br /> amount of damages as described in Paragraph 6 in ex- may be instituted in any court or competent jurisdiction in
<br /> cess of the Balance or the Contract Price incurred by the the location in which the work or part of the work is located
<br /> O�vner resulting from the Contractor's defauit; or and shall be instituted within nvo years after Contractor
<br /> 3.� Waive its right to perform and complete, arrange Derault or within t�vo years arter the Contractor ceased
<br /> ror completion, or obtain a new contractor and with Working or within two years arter the Surety reruses or rails
<br /> reasonable promptness under the circumstances: to perrorm its obligations under this Bond, whichever oc-
<br /> curs first. If the provisions or this Paragraph are void or
<br /> .1 Arter investigation, determine the amount for prohibited by larv, the minimum period oi limitation avail-
<br /> AIA DOCU�tiIENT A312 • PERFORMANCE BOND AND PAYMEtiT BONO • �ECE.�tBER 19&t ED. •AIA �
<br /> THE A.�tERICAN INSTIT!_1TE OF ARCHITECTS.1i35 NEW YORK AVE., N.W., WA$HI�GTON, D.C. 20005 A312-�954 2
<br /> THIRD P2INTING • MARCH 1987
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