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Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921 Exercise 17
Brown's Roofing, Inc. (Brown) entered into surety bond agreements with International Fidelity Insurance Company (IFIC) to guarantee Brown's contributions to trust funds operated by the Local Union No. 30 of the United Union of Roofers, Waterproofers and Allied Workers (Union), pursuant to a collective bargaining agreement (CBA) between Brown and Union. The bond agreements provided that the Union was to notify IFIC within one year of Brown's default in payment. IFIC would then pay the amounts due under the CBA. Brown became delinquent on its payments, and the Union sued Brown for payment. After a few months, Brown and the Union entered into a settlement agreement, whereby Brown was required to pay the then-amount of the delinquency under the CBA. IFIC received no notice from the Union of any of the proceedings. Approximately one year later, Brown failed to make payments under the settlement agreement. This time, more than a year after the Union sued Brown, the Union notified IFIC that it was making a claim on the surety bond. Was IFIC still liable for payment under the terms of the surety bond?
Explanation
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Surety bond:
It is an agreement requiri...
Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
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