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. If the price of the work stipulated or reasonably estimated in the general contractor's contract exceeds one hundred thousand dollars, the bond shall be issued by a surety company licensed to do business in this state. B. The amount of the bond shall not be less than the price of the work stated or estimated in the notice of contract. 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. (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 to the extent that the surety is materially prejudiced by the change or action, 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. F. (1) Except as provided in Paragraph (2) of this Subsection, nothing in this Part shall be construed to preclude a surety from asserting any defense to the principal obligation that its principal could assert except lack of capacity or discharge in bankruptcy of the principal obligor. (2) The surety shall be obligated and required to issue payment to a seller for claims by a seller under the following conditions: (a) The claim is for the price of movables delivered in conformity with the specifications provided in the order for such movables. (b) No sooner than forty-five days after delivery of the movables, the seller sends a notice of nonpayment to the general contractor, the surety, and the owner. (c) The seller has not been paid in full on or before ninety days after delivery of the movables. (3) If the requirements of Paragraph (2) of this Subsection are satisfied, the surety shall pay the seller within ten days after the seller sends a payment notice to the surety. (4) The claim of a seller and right to payment as provided in this Subsection is in addition to and not in derogation of any other rights, claims, or remedies available to a seller under this Part. (5) Any notice required under this Section shall be served by mailing the same by registered or certified mail, postage prepaid, in an envelope addressed to the last known address of the general contractor, the surety, and the owner. The return receipt indicating that registered mail or certified mail was properly addressed to the last known address of the general contractor, the surety, and the owner and deposited in the United States mail regardless of whether the registered or certified mail was actually delivered, refused, or unclaimed satisfies the notice provision of this Section. Acts 1981, No. 724, §1, eff. Jan. 1, 1982; Acts 2019, No. 325, §1; Acts 2024, No. 758, §1. NOTE: See Acts 2019, No. 325, §§6, 7, and 10, regarding applicability.