Surety

Question 1

What is the applicability of Texas Government Code Chapter 2253?

Answer 1

Public works contracts in Texas (state, county, municipality, school district).

Question 2

What must a contractor provide for contracts over $25,000 under Texas Government Code Chapter 2253?

Answer 2

• Performance bond - protects the government owner
• Payment bond - protects subcontractors, suppliers, and laborers

Question 3

What is the deadline to sue on a bond under Texas Government Code Chapter 2253?

Answer 3

Within 1 year after final completion/acceptance of project.

Question 4

True or False: Bonds are the exclusive remedy on public projects, and liens are allowed against public property.

Answer 4

False

Question 5

What bonds are required under the Federal Miller Act for federal projects over $100,000?

Answer 5

• Performance bond
• Payment bond

Question 6

What is the alternative payment protection provided under the Federal Miller Act for contracts between $25,000 and $100,000?

Answer 6

FAR provides alternative payment protections.

Question 7

What rights do direct subcontractors have under §3133 of the Federal Miller Act?

Answer 7

Direct subcontractors can sue on the payment bond.

Question 8

What is the notice requirement for 2nd-tier suppliers under the Federal Miller Act?

Answer 8

Must give 90-day notice.

Question 9

Where must actions under the Federal Miller Act be filed?

Answer 9

In U.S. District Court, styled as ‘United States for the use of [claimant]’.

Question 10

What types of contracts can waive bond requirements under §3134 of the Federal Miller Act?

Answer 10

• Military
• Transportation
• NOAA

Question 11

Define surety under Texas CPRC Chapter 43.

Answer 11

Surety includes endorsers, guarantors, and all forms of suretyship.

Question 12

What right does a surety have under §43.002 of Texas CPRC?

Answer 12

Surety can compel obligee to sue principal; if obligee delays, surety is discharged.

Question 13

According to §43.003, what is the execution order for a surety?

Answer 13

Levy principal’s property first, surety second.

Question 14

What is subrogation in the context of suretyship?

Answer 14

Surety who pays judgment is subrogated to creditor’s rights.

Question 15

What are statutory bonds?

Answer 15

• Required by statute (Gov’t Code 2253, Miller Act)
• Strict compliance with notice/deadlines is mandatory.

Question 16

What defines common law bonds?

Answer 16

• Voluntarily provided
• Governed by contract
• Broader claims may be available; not restricted to statutory scheme.

Question 17

List three defenses available to a surety.

Answer 17

• Obligee’s material alteration of contract without consent
• Fraud, misrepresentation, or release of principal
• Failure of obligee to comply with statutory prerequisites (e.g., notice deadlines)

Question 18

What are the obligations of a surety?

Answer 18

Co-extensive with principal’s liability (but not greater).

Question 19

What rights does a surety have upon payment?

Answer 19

Subrogation rights against principal and indemnitors.

Question 20

What key points should be memorized for the TBLS Exam regarding Texas Government Code Chapter 2253?

Answer 20

• Performance & payment bonds required >$25K
• No liens against public property.

Question 21

What key points should be memorized for the TBLS Exam regarding the Miller Act?

Answer 21

• Performance & payment bonds required >$100K
• 90-day notice
• 1-year statute.

Question 22

What are the key points regarding CPRC 43 for the TBLS Exam?

Answer 22

• Surety defenses (can force obligee to sue; subrogation rights).

Question 23

Differentiate between statutory and common law bonds.

Answer 23

• Statutory = exclusive remedy, strict compliance
• Common law = contract governed.

Question 24

What is a common exam trap related to subcontractor notice under the Miller Act?

Answer 24

Subcontractor fails to give 90-day notice under Miller Act.

Question 25

What is a common exam trap regarding liens on public property?

Answer 25

Attempting lien on public property instead of bond claim.

Question 26

What is a common exam trap related to bond requirements on public projects?

Answer 26

Owner failed to require bond on >$25K public project.