Originally published Summer 2023
While many surety bonds explicitly state whether they are intended to be statutory or common law bonds, a case out of a Tennessee bankruptcy court serves as an important warning that such bond provisions will not always control as anticipated by the issuing surety.1 Ultimately, commonly used bond language expressly designating it a statutory bond when state law requires the bond, and meant to substitute the state’s bond terms, was deemed ineffectual. This resulted in the bonds’ enforcement as common law bonds, providing for more generous terms and more lenient barriers than required by statute.

Marina De Rosa is an Associate at Ernstrom & Dreste, LLP, in Rochester, New York. Her primary areas of practice focus on construction and surety law as well as complex commercial litigation. Her Juris Doctor degree is from Syracuse University College of Law, where she was an associate editor of the Journal of Science and Technology. She is a member of the ABA TIPS FSLC. De Rosa can be reached at mderosa@ed-llp.com or 585.242.4960.
2 In this case, equipment also included utilities such as gas, water, power, light, and other costs.
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