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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 assigns to the Owner for the performance ruined, tender payment therefor to the
<br /> of the Construction Contract,which is incorporated herein Owner; or
<br /> by reference.
<br /> 2 If the Contractor performs the Construction Contract, -2 Deny liability in whole or in part and notify the
<br /> Owner citing reasons therefor.
<br /> the Surety and the Contractor shall have no obligation
<br /> under this Bond, except to participate in conferences as S If the Surety does not proceed as provided in Paragraph
<br /> provided in Subparagraph 3.1. 4 with reasonable promptness,the Surety shall be deemed
<br /> to be in default on this Bond fifteen days after receipt of an
<br /> 3 If there is no Owner Default, the Surety's obligation additional written notice from the Owner to the Surety
<br /> under this Bond shall arise after: demanding that the Surety perform its obligations under
<br /> 3.1 The Owner has notified the Contractor and the this Bond, and the Owner shall be entitled to enforce any
<br /> Surety at its address described in Paragraph 16 below remedy available to the Owner. If the Surety proceeds as
<br /> that the Owner is considering declaring a Contractor provided in Subparagraph 4.4,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 further notice the Owner shall be
<br /> conference with the Contractor and the Surely to be
<br /> held not later than fifteen days after receipt of such entitled to enforce any remedy available to the Owner.
<br /> notice to discuss methods of performing the Construe- 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 Suretv
<br /> Surety agree, the Contractor shall be allowed a reason- elects to act under Subparagraph 4,1, 4.2, or 4.3 above,
<br /> able time to perform the Construction Contract, 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 /> Owner to the Surety shall not be greater than those of the
<br /> 3.2 The Owner has declared a Contractor Default and
<br /> formally terminated the Contractor's right to complete Owner under the Construction Contract.To the limit of the
<br /> amount of this Bond, but subject to commitment by the
<br /> the contract. Such Contractor Default shall not be d complete
<br /> dared earlier than twenty days after the Contractor and Owner of the Balance of the Contract Price to mitigation of
<br /> Sure-
<br /> the Surety have received notice as costs and damages on the Construction Contract,the Sure-
<br /> Y provided in Sub- ty is obligated without duplication for:
<br /> paragraph 3.1; and
<br /> 3.3 The Owner has agreed to pay the Balance of the 6.1 The responsibilities of the Contractor for correc-
<br /> Contract Price to the Surety in accordance with the tion of defective work and completion of the Construc-
<br /> terms of the Construction Contract or to a contractor tion Contract;
<br /> selected to perform the Construction Contract in accor- 6.2 Additional legal, design professional and delay
<br /> dance with the terms of the contract with the Owner. costs resulting from the Contractor's Default, and re-
<br /> 4 When the Owner has satisfied the conditions of Para- sulting from the actions or failure to act of the Surety
<br /> graph 3, the Surety shall promptly and at the Surety's ex- under Paragraph 4; and
<br /> pense take one of the following actions: 6.3 Liquidated damages, or if no liquidated damages
<br /> 4.1 Arrange for the Contractor, with consent of the are specified in the Construction Contract,actual dam-
<br /> Owner, to perform and complete the Construction ages caused by delayed performance or non-perfor-
<br /> Contract; or mance of the Contractor.
<br /> 4.2 Undertake e to perform and complete the Construe- 7 The Surety shall not be liable to the Owner or others for
<br /> Con-
<br /> tion Contract to through its agents or through rode- obligations of the Contractor that are unrelated to the Con-
<br /> pendent contractors; or struction Contract, and the Balance of the Contract Price
<br /> shall not be reduced or set off on account of any such
<br /> 4.3 Obtain bids or negotiated proposals from unrelated obligations. No right of action shall accrue on
<br /> qualified 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 Owner and the contractor ing changes of 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 /> with performance and payment bonds executed by a g
<br /> 11ons.
<br /> qualified surety equivalent to the bonds issued on the
<br /> Construction Contract, and pay to the Owner the 9 Any proceeding, legal or equitable, under this Bond
<br /> amount of damages as described in Paragraph 6 in ex- maybe instituted in any court of competent jurisdiction in
<br /> cess o€the Balance of the Contract Price incurred by the the location in which thework or part of thework is located
<br /> Owner resulting from the Contractor's default; or and shall be instituted within two years after Contractor
<br /> 4.4 Waive its right to perform and complete,arrange Default or within two years after the Contractor ceased
<br /> for completion, or obtain a new contractor and with working or within two years after the Surety refuses or fails
<br /> reasonable promptness under the circumstances: to perform its obligations under this Bond,whichever oc-
<br /> curs first. If the provisions of this Paragraph are void or
<br /> .1 After investigation,determine the amount for prohibited by law,the minimum period of limitation avail-
<br /> AIA DOCUMENT A312-PERFORMANCE BOND AND PAYMENT BOND-DECEMBER 1984 ED -AIA('
<br /> THE AMERICAN INSTITUTE OF ARCHITECTS, 1736 NEW YORK AVE.,N W,WASHINGTON.D C 20006 A312-1984 2
<br /> THIRD PRINTING-MARCH 1987
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