34-222

34-222. Surety bond required; suit on bond;
limitations

A. Except where specifically exempted by statute, before any contract is executed
with any person for the construction, alteration, or repair of any public building, a
public work or improvement of any county, city or town, or officer, board or commission
thereof, and irrigation, power, electrical, drainage, flood protection and flood control
districts, tax levying public improvement districts, and county or city improvement
districts, the person shall furnish to the agent entering into such contract the
following bonds which shall become binding upon the award of the contract to such person,
who, for purposes of this article, means "contractor":

1. A performance bond in an amount equal to the full contract amount conditioned
upon the faithful performance of the contract in accordance with plans, specifications
and conditions thereof. Such bond shall be solely for the protection of the public body
awarding the contract.

2. A payment bond in an amount equal to the full contract amount solely for the
protection of claimants supplying labor or materials to the contractor or his
subcontractors in the prosecution of the work provided for in such contract.

B. Each such bond shall include a provision allowing the prevailing party in a suit
on such bond to recover as a part of the judgment such reasonable attorneys' fees as may
be fixed by a judge of the court.

C. Notwithstanding any other statute, each such bond shall be executed solely by a
surety company or companies holding a certificate of authority to transact surety
business in this state issued by the director of the department of insurance pursuant to
title 20, chapter 2, article 1. The bonds shall not be executed by an individual surety
or sureties, even if the requirements of section 7-101 are satisfied. The bonds shall be
payable to the public body concerned.

D. Such bonds shall be filed in the office of the department, board, commission,
institution, agency or other contracting body awarding the contract.

E. It shall be illegal for the invitation for bids, or any person acting or
purporting to act on behalf of the contracting body, to require that such bonds be
furnished by a particular surety company, or through a particular agent or broker.

F. The conditions and provisions in the payment bond regarding the surety's
obligations shall follow the following form:

Now, therefore, the condition of this obligation is such, that if the
principal promptly pays all monies due to all persons supplying labor or
materials to the principal or the principal's subcontractors in the
prosecution of the work provided for in the contract, this obligation is
void. Otherwise it remains in full force and effect.

Provided, however, that this bond is executed pursuant to the provisions of
title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities
on this bond shall be determined in accordance with the provisions, conditions
and limitations of title 34, chapter 2, article 2, Arizona Revised Statutes,
to the same extent as if they were copied at length in this agreement.

The prevailing party in a suit on this bond shall recover as a part of the
judgment reasonable attorney fees that may be fixed by a judge of the court.

G. The conditions and provisions in the performance bond regarding the surety's
obligations shall follow the following form:

Now, therefore, the condition of this obligation is such, that if the
principal faithfully performs and fulfills all of the undertakings, covenants,
terms, conditions and agreements of the contract during the original term of
the contract and any extension of the contract, with or without notice to the
surety, and during the life of any guaranty required under the contract, and
also performs and fulfills all of the undertakings, covenants, terms,
conditions and agreements of all duly authorized modifications of the contract
that may hereafter be made, notice of which modifications to the surety being
hereby waived, the above obligation is void. Otherwise it remains in full
force and effect.

Provided, however, that this bond is executed pursuant to the provisions of
title 34, chapter 2, article 2, Arizona Revised Statutes, and all liabilities
on this bond shall be determined in accordance with the provisions of title
34, chapter 2, article 2, Arizona Revised Statutes, to the extent as if it
were copied at length in this agreement.

The prevailing party in a suit on this bond shall recover as part of the
judgment reasonable attorney fees that may be fixed by a judge of the court.

H. If the prime contract or specifications require any persons supplying labor or
materials in the prosecution of the work to furnish payment or performance bonds, these
bonds shall be executed solely by a surety company or companies holding a certificate of
authority to transact surety business in this state issued by the director of the
department of insurance pursuant to title 20, chapter 2, article 1. Notwithstanding the
provisions of any other statute, the bonds shall not be executed by an individual surety
or sureties, even if the requirements of section 7-101 are satisfied.

I. All bonds given by a contractor and surety, pursuant to the provisions of this
article, regardless of their actual form, will be deemed by law to be the form required
and set forth in this article and no other.