The below text is a copy of our the Industry Standard Retention Bond Wording. Feel free to copy and paste this into your tender documentation or please get in touch and we shall be happy to provide you with a fully drafted copy which includes your company details and the specifics of your upcoming contract. Simply click here. Insert your name and email address, Type "Retention Bond Wording" in the subject line and your company details in the message and we shall provide you with a drafted wording as soon as possible.
If you'd like to learn more about Retention Bonds then please read our overview Retention Bonds Explained in 5 minutes (pssurety.co.uk)
RETENTION BOND
THIS BOND is made as a deed on the xxth day of (month) 2020
BETWEEN
(1) MAIN CONTRACTOR whose registered office is at (Insert Address) ('Main Contractor')
AND
(2) SURETY whose registered office is at (Insert Address) ('Surety')
AND
(3) Specialist whose registered office address is at (Insert Address) ('Specialist')
WHEREAS
(A) By a Sub-Contract for (Contract Details) at (Contract Address) date the day of 20 entered into between the Main Contractor and the Specialist ('Sub-Contract') the Specialist has agreed to execute works (Works') for the Main Contractor at a price of £0,000,000.00 (Zero Million and Zero Thousand Pounds Sterling) ('Sub-Contract Sum').
(B) The Main Contractor has agreed that in consideration of the provision of this Bond by the Surety to the Main Contractor at the request of the Specialist, the Main Contractor will not make any deduction of sums by way of retentions from payments to be made to the Specialist under the terms and conditions of the Sub-Contract.
NOW THIS DEED WITNESSES as follows: -
(1) Subject to the provisions of this Bond, the Surety hereby guarantees to the Main Contractor the due and punctual performance by the Specialist of the obligations on its part to be performed contained in Clause 2.22 of the Sub-Contract so that in the event of any default thereunder on the part of the Specialist, the Surety shall pay any damages actually and reasonably sustained by the Main Contractor subject to the limitations set out in clause 2 hereof.
(2) (a) Subject to the provisions of (2)(b) hereof, the liability of the Surety under this Bond shall not exceed such sum as, but for the provision of this Bond, would otherwise have been held by the Main Contractor by way of retention at the time of any breach of Clause 2.22 of the Sub-Contract, but in any event the maximum aggregate liability of the Surety hereunder shall not exceed whichever is the lesser of either an amount equivalent to (3% or 5%) of the Sub-Contract Sum or £000,000.00 (Zero Hundred Thousand, Zero Hundred Pounds Sterling).
(b) The maximum aggregate liability of the Surety hereunder shall automatically be reduced to an amount equivalent to (1.5% or 2.5%) of the Sub-Contract sum or £00,000.00 (Zero Thousand, Zero Hundred Pounds Sterling) on the xxst day of Month Year which is the anticipated date of practical completion of the Works.
(3) Neither this Deed nor any rights arising under or in connection with it may be assigned without the prior written consent of the Surety and the Specialist.
(4) The Surety covenants and agrees that without limitation any of the actions by the Main Contractor which are set out below may be made and done without notice to or the consent of the Surety and without in any way affecting, changing or releasing the Surety from its obligations hereunder or affecting the liability of the Surety hereunder. The actions are:-
(a) waiver by the Main Contractor of any of the terms, provisions, conditions, obligations and agreements of the Sub-Contract or any failure to make demand upon or take action against the Specialist:
(b) any modification or changes to the Sub-Contract:
(c) the giving by the Main Contractor of any consent to an assignment or the making of any assignment of the Sub-Contract:
(d) the granting of extensions of time to the Specialist: and
(e) the release of any Co-Surety.
(5) This Deed shall be governed by and construed in accordance with English law and shall be subject to the exclusive jurisdiction of the English Courts.
(6) This Deed shall finally expire and cease to be of effect on the xxst day of Month Year whether returned to the Surety or not.
IN WITNESS Whereof this Bond has been executed as a Deed delivered the day and year first before written by
The Common Seal of
Specialist
was hereunto affixed in the presence of:-
………………………….. …………………………..
[name] [Director / Secretary
………………………….. …………………………..
[name] [Director / Secretary
EXECUTED AND DELIVERED as a Deed (but not delivered until the date inserted above) by
SURETY INTERNATIONAL INSURANCE COMPANY LIMITED acting by:
……………………………………………………………………………………. Attorney
……………………………………………………………………………………. Name
In the presence of:
……………………………………………………………………………………. Witness
……………………………………………………………………………………. Name
……………………………………………………………………………………. Address