Article Date: 10/22/2012

Early Payment of Retainage Did Not Discharge Bonding Company

A project owner’s premature release of the contract retainage to the contractor was not a material alteration of the construction contract and did not discharge the contractor’s payment surety of its obligation under the bond. The retainage constituted less than five percent of the contract price and there was no evidence of bad faith on the part of the project owner.

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