Performance Bonds As Deeds: Signed, Sealed And…Delivered?

Performance Bonds as Deeds Deeds play a central role in construction and engineering projects.  Many construction and engineering contracts, and similar contracts such as collateral warranties, are entered into as deeds.  The primary advantage of doing so is to secure the benefit of a longer limitation period (12 years) than if the contract were not a deed (6 years).  Rights under deeds therefore last longer.

Deeds also perform a special role when it comes to performance bonds.  A performance bond, when issued in the form of a deed, binds the bondsman or guarantor even though there is no counterparty to the deed.  Performance bonds are commonly issued with no counterparty, but the bond will name a beneficiary who is entitled to enforce the instrument.  The beneficiary will be legally entitled to enforce the bond against the bondsman because the bond is in the form of a deed.  If, however, there is an irregularity concerning the bond so that it does not constitute a