Ask Question
BusinessBusiness
27 June, 13:22

Vasquez Construction has been awarded a contract by a local school board to build a new public school and must provide a performance bond. a. With respect to the performance bond, identify the principal, surety, and obligee. b. If Vasquez Construction fails to complete the building according to the terms of the contract, what would be the surety's obligation? c. Does the surety have any recourse against Vasquez Construction in this example? Explain your answer.

+3
Answers (1)
  1. 27 June, 13:42
    0
    (a) The Vasquez construction is the principal, the surety is the party that underwrites the contract and local school board is the obligee.

    (b) If Vasquez fails to finish the contract, then the surety will be required to pay for the loss suffered by the obligee due to the contract failure.

    (c) In a surety bonds contract, the surety has a legal right to get back the losses from the principal.

    Explanation:

    Solution:

    (a) Under a performance bond contract, the owners assures that the work will be completed within a specific time frame and contract specification.

    In this example given, the Vasquez construction is the principal, the surety is the party that underwrites the contract and local school board is the obligee.

    (b) If the Vasquez construction fails to complete or finish the contract, then the surety will be obliged to pay for the loss suffered by the obligee due to the failure of the contract.

    (c) In a surety bond contract, the surety has a legal right to recover the losses from the principal. for this later on, the surety can recover it's loss from the principal.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Vasquez Construction has been awarded a contract by a local school board to build a new public school and must provide a performance bond. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
The positively-sloped part of the long-run average total cost curve is due to which of the following? a) Diseconomies of scale b) Diminishing returns c) The firm being able to take advantage of large-scale production techniques as it expands its
Answers (1)
Who is harmed the MOST during periods of unexpected inflation? A) 1 B) 1 and 3 C) 1, 2, and 3 D) 2 and 4
Answers (2)
What factors affecting people's lives might contribute to the income gap?
Answers (1)
1 of 3) What makes up a "Ticker Symbol" in the United States? A. Between 1 and 5 Letters or Numbers B. The first 3 letters of a company's name C. Between 1 and 5 letters only D. Between 1 and 7 numbers only
Answers (1)
Brown Office Supplies recently reported $15,500 of sales, $8,250 of operating costs other than depreciation, and $1,750 of depreciation. It had $9,000 of bonds outstanding that carry a 7.
Answers (1)
New Questions in Business
In the circular flow model of the market system, households' major role is to Multiple Choice buy both products and resources. sell both products and resources. buy products and sell resources. sell products and buy resources.
Answers (1)
Lucia Ltd. reported net income of $135,000 for the year ended December 31, 2016. January 1 balances in accounts receivable and accounts payable were $29,000 and $26,000, respectively.
Answers (1)
Ten years ago, Jacobson Recovery purchased a wrecker for $285,000 to move disabled 18-wheelers. He anticipated a salvage value of $50,000 10 years after the initial purchase. During this time his average annual revenue totaled $52,000.
Answers (1)
Using what you have learned in your focus group, you begin your analysis of the buyer decision process. In the first stage of the process, you need to show consumers that their existing state does not equal their desired state.
Answers (1)
When demand curves intersect, the curve with the larger slope in absolute value (the steeper demand curve) is more elastic?
Answers (1)
Home » Business » Vasquez Construction has been awarded a contract by a local school board to build a new public school and must provide a performance bond. a. With respect to the performance bond, identify the principal, surety, and obligee. b.
Sign Up Forgot Password?