Share on LinkedInShare on LinkedIn

ARTICLE · 05 DECEMBER 2019

Construction Bonds – What You Need To Know

Miller Thomson
Miller Thomson
Contributor

Miller Thomson

Miller Thomson LLP ("Miller Thomson") is a national business law firm with approximately 500...

View firm profile
Explore more from Miller Thomson

Construction bonds are a type of surety bond that guarantees that a party (typically a contractor) will comply with its contractual and legal obligations.

CanadaReal Estate and Construction
Cara Shamess
Cara Shamess
Author LinkedIn connections

What are Construction Bonds?

Construction bonds are a type of surety bond that guarantees that a party (typically a contractor) will comply with its contractual and legal obligations, failing which, the bond will protect and compensate the party to whom the defaulting party owed the contractual and legal duties.  A construction bond is a three-way contract between the principal (the party that owes the contractual and legal obligations), the obligee (the party that is owed an obligation by the principal) and the surety (the party that issues the bond and financially guarantees to the obligee that the principal will perform its obligations).

There are five types of construction bonds:

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Could The Old Ontario Construction Lien Act Still Apply To Your Project? The Court Of Appeal Weighs In

A 2026 Ontario Court of Appeal decision reveals that construction contracts signed years after legislative reforms may still be governed by the old Construction Lien Act if the procurement process began before July 1, 2018. The ruling demonstrates how early project proposals and negotiations can determine which statutory regime applies, regardless of when the final contract was executed or where the project was ultimately built.
CanadaReal Estate and Construction
Miller Thomson
Miller Thomson
Article

Here’s The Drill: Introducing The New CCDC 32 – 2026 Progressive Design-Build Contract

CCDC 32 introduces a progressive design-build framework that allows owners and design-builders to collaboratively develop project scope, budget, and schedule before committing to a final price. Through a two-phase structure with project gates and off-ramp provisions, this standardized contract addresses complex construction projects where requirements cannot be fully defined at the outset. How does this collaborative approach balance flexibility with cost certainty while reshaping traditional roles in const
CanadaReal Estate and Construction
WeirFoulds LLP
WeirFoulds LLP
Article

Quebec’s New Truck Licence Transfer Rules: What Ontario Carriers Need To Do Now

Ontario commercial truck drivers with less than two years of heavy-truck experience must now pass a practical road test administered by Quebec's SAAQ before transferring their licence to operate heavy vehicles in the province. This new requirement follows fatal collisions and an Ontario Auditor General audit that exposed significant gaps in training standards and provider oversight. Carriers operating across the border need to factor these requirements into workforce planning, recruitment timelines, and dis
CanadaTransport
Miller Thomson
Miller Thomson
Article

Canadian Income Tax Source Deductions And Payroll Taxes: What Every Foreign Employer Needs To Know

Foreign companies hiring Canadian employees or allowing remote work from Canada face immediate payroll obligations that begin the moment employment duties are performed on Canadian soil. Understanding income tax source deductions, CPP and EI premiums, provincial payroll taxes, and director liability rules is essential for compliance, regardless of whether the employer maintains a physical Canadian presence.
CanadaTax
Miller Thomson
Miller Thomson
Article

Quebec’s Bill 24: New Consent Requirements For AI Generated Advertising And The Legal Risks Business Cannot Afford To Ignore

Quebec's new Bill 24 prohibits businesses from using a person's identity or image in consumer advertising without consent, creating significant compliance obligations for companies using AI-generated content, synthetic voices, and digitally altered spokespersons. The legislation introduces broad enforcement powers and extends liability beyond content creators to platforms that distribute or facilitate unauthorized representations.
CanadaConsumer Protection
Miller Thomson
Miller Thomson
Article

Could The Old Ontario Construction Lien Act Still Apply To Your Project? The Court Of Appeal Weighs In

A 2026 Ontario Court of Appeal decision reveals that construction contracts signed years after legislative reforms may still be governed by the old Construction Lien Act if the procurement process began before July 1, 2018. The ruling demonstrates how early project proposals and negotiations can determine which statutory regime applies, regardless of when the final contract was executed or where the project was ultimately built.
CanadaReal Estate and Construction
Miller Thomson
Miller Thomson
Article

Consultation du Canada sur la transparence en matière d’IA : ce que les entreprises doivent savoir avant le 23 septembre

Canadian organizations developing, acquiring, deploying or using AI have until September 23, 2026 to contribute to shaping the federal government's approach to AI transparency through a public consultation. Innovation, Science and Economic Development Canada is seeking input on five key areas that could lead to new disclosure obligations, incident reporting requirements, and AI agent tracking mechanisms.
CanadaStrategy
Miller Thomson
Miller Thomson