Bonding procedures for north american and international construction contracts

Surety bonding has become essential in today's construction market. The industry is complex, and contractors face high expectations for contract performance. The global construction market and the chance to learn from others justify discussing general bonding procedures and comparing North American and international construction bonding. The main difference is in the type of bonding; the North American construction industry uses an obligatory type rather than the forfeiture type commonly used internationally. Further, there are noticeable differences in bond amounts due to the type of bonding. The procedures used by North American sureties in issuing bonds are more rigid as the surety assumes the entire responsibility of the contract completion whereas bonds are considered an extension of the contractor's line of credit in international contracts. The common law implications, surety requirements, premiums, and other concerns are detailed.