Secure your projects with properly worded surety bonds

Bond text: more than just a formality

The bond wording acts as the instruction manual for the contract. It outlines when and how the surety may be called upon, the limits of its liability, and the rules that apply if obligations aren’t met.

A well-drafted bond:

• Complies with current standards and market practices
• Avoids ambiguity and legal grey areas
• Protects both the project owner and the contractor

In contrast, vague or imprecise wording can expose you to greater obligations than anticipated, or even alter the nature of the bond entirely.

Common risks to watch for

In many cases, the bond wording is supplied by the project owner or taken from a generic template without a thorough review. That might seem harmless, but it can lead to serious consequences.

Common mistakes include:

• Unexpectedly increased responsibilities
• Reclassification of the bond as a financial guarantee, with very different legal implications
• Biased clauses favouring only the beneficiary
• Weakened or nullified protection in the event of a dispute

What was meant to protect you could become a vulnerability...legally, financially and operationally.

A word of caution about public sector forms

Many public-sector project owners, such as school service centres, still use templates from sources like the Édilex database or internal forms. 

Some of these forms:

• Haven’t been updated in years
• No longer reflect current legal standards or Treasury Board requirements
• Mimic the language of financial guarantees, significantly altering the obligations at stake

It’s difficult to assess whether a bond’s wording is acceptable...until a dispute arises.

Double-check before you sign! 

Before you issue or sign a bond:

• Read the wording carefully to identify any unusual clauses
• Ensure the form is current, compliant and recognized
• Don’t hesitate to ask questions, even if the document appears “standard”

When in doubt, consult experts. 

Legal expertise: your safety net

Regulations change. Contract requirements are becoming increasingly detailed. Grey areas abound. That’s why having a legal review before signing has become an essential step.

A legal expert can:

• Ensure clauses are valid and enforceable
• Help prevent disputes before they arise
• Support stronger negotiations with the project owner when changes are needed

Specialized lawyers are trained to analyze bond texts in detail. They know where risks hide, even in sentences that seem routine. Most importantly, they can recommend wording that’s clearer, more balanced, and better suited to the project at hand.

How we can help

If your bond form has flaws, we act quickly to recommend a more appropriate solution.

Our team can:

• Recommend revisions or replacements for problematic forms
• Suggest templates that meet current standards
• Involve our surety-focused legal experts to analyze specific clauses in detail

We also support contractors who want to negotiate bond wording with project owners. This guidance can encourage constructive dialogue and help lay a solid foundation for collaboration.

A strong bond starts with strong wording

A construction project can be jeopardized by a poorly drafted document. When it comes to surety bonds, protection always begins with careful reading and developing the reflex to get expert validation.

Need a second opinion? Contact our surety bonds experts. That’s what we’re here for.