Bill > SB425

This bill adds a new section to the California Code of Civil Procedure that establishes specific conditions for bonds involving public entities. Specifically, when a bond is given to a public entity (as defined in the Public Contract Code) for projects related to purchasing, constructing, expanding, improving, or rehabilitating real or tangible personal property, the bond will only be considered effective if the public entity agrees to two key obligations: (1) make all payments to the principal or surety (in case the surety agrees to complete work after a principal's default) according to the contract terms, and (2) perform all necessary obligations owed to the principal under the contract. The bill defines "contract" broadly to include both written and oral agreements that involve property-related work. This new provision aims to provide clarity and mutual responsibilities for bonding arrangements involving public entities, ensuring that both the principal (typically a contractor) and the public entity have clear expectations and commitments before the bond becomes operational.

Business and Industry, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB425