No one shall be nominated or act as an arbitrator who is in any way financially interested in this contract or in the business affairs of either the Owner, Contractor or Architect. The general procedure shall conform to the laws of the State in which the work is to be erected. Unless otherwise provided by such laws, the parties may agree upon one arbitrator; otherwise there shall be three, one named, in writing, by each party to this contract, to the other party and to the Architect, and the third chosen by these two arbitrators, or if they fail to select a third within ten days, then he shall be chosen by the presiding officer of the Bar Association nearest to the location of the work. Should the party demanding arbitration fail to name an arbitrator within ten days of his demand, his right to arbitration shall lapse. Should the other party fail to choose an arbitrator within said ten days, then such presiding officer shall appoint such arbitrator. Should either party refuse or neglect to supply the arbitrators with any papers or information demanded in writing, the arbitrators are empowered by both parties to proceed ex parte. The arbitrators shall act with promptness. If there be one arbitrator his decision shall be binding; if three the decision of any two shall be binding. Such decision shall be a condition precedent to any right of legal action, and wherever permitted by law it may be filed in Court to carry it into effect. The arbitrators, if they deem that the case demands it, are authorized to award to the party whose contention is sustained such sums as they shall deem proper for the time, expense and trouble incident to the appeal and, if the appeal was taken without reasonable cause, damages for delay. The arbitrators shall fix their own compensation, unless otherwise provided by agreement, and shall assess the costs and charges of the arbitration upon either or both parties. The award of the arbitrators must be in writing and, if in writing, it shall not be open to objection on account of the form of the proceedings or the award, unless otherwise provided by the laws of the State in which the work is to be erected. In the event of such laws providing on any matter covered by this article otherwise than as hereinbefore specified, the method of procedure throughout and the legal effect of the award shall be wholly in accordance with the said State laws, it being intended hereby to lay down a principle of action to be followed, leaving its local application to be adapted to the legal requirements of the place in which the work is to be erected. CHAPTER XVIII BOND The comparative values of personal Bonds and of surety company Bonds, and of certified checks, have been discussed previously. This chapter is concerned mainly with the form of Bonds. The Contract Bond adopted by the American Railway Engineering Association has the following form: lawful money of the United States of America (or Canada, as the case may be), to be paid to said.... .....its successors and assigns, to which payment the undersigned, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns. The Condition of this Obligation is that if ... Contractor, shall faithfully furnish and do everything required in the contract, executed in writing, dated..... between.. for..... .19.. ..Company, .this obligation shall become of no effect; other . Contractor, and....... wise it shall continue in full force. day of.... .19... . (SEAL) This is substantially the same in form as that used by the Cambridge Bridge Commission, the principal point of difference being that the latter refers to the "foregoing Contract" contained probably in a single pamphlet, while the Bond above describes the Contract. The Cambridge Bridge form is this: That the undersigned are held and bound unto the Cambridge Bridge Commission in the sum of two hundred thousand (200,000) dollars, lawful money of the United States of America, to be paid to said Commission or its assigns, to which payment, well and truly to be made, the undersigned jointly and severally bind themselves, their heirs, executors, administrators, successors and assigns. The Condition of this Obligation is, that if the party designated as Contractor in the foregoing contract shall faithfully furnish, and do everything required therein of said party, this obligation shall become of no effect, otherwise it shall continue in full force. Signed, sealed and delivered this January 20, 1904. Attest: THE CITY TRUST SAFE DEPOSIT AND GUARANTY (SEAL) Charles H. Laird, Jr., Asst. Secty. The Corporation or Company signing above is incorporated in the State of Pennsylvania, and has its usual place of business in Massachusetts at 23 Central Street, Boston. The distinguishing feature of either of these is its simplicity. The Contractor has made his Contract and agreed to furnish and to do certain things. A failure to keep his agreement brings the Bond into action. If the Contract recites all that is required of the Contractor, this simple Bond is sufficient. If the first draft of the Contract omits any point ordinarily specially covered in the Bond, the Contract should be revised (before the letting) so that in its final form it will cover everything necessary. For instance, the indemnity clause in the Uniform Contract Form makes an indemnity clause in the Bond superfluous. In the above forms of Bond, the Contractor is not made the "principal" of the Bond. Why should he be so made the principal? If he does not do what he agreed in his Contract, if he defaults, why should one have further disagreement and trouble with him? The direct way is to reach the surety. A lawsuit with the surety may be unnecessary if the surety is businesslike. The surety will, no doubt, have an agreement with the Contractor by which to recoup himself if the Contractor is solvent, but that is his affair. It is cleaner cut for the railroad, or the City, to look to the surety directly, rather than to straddle between the Contractor and the surety. The question may arise whether a surety company will sign a Bond in the above form. An answer to this is that the following companies did sign the above form of Bond of the Cambridge Bridge Commission : The Etna Indemnity Company. United States Fidelity and Guaranty Company. The City Trust, Safe Deposit, and Surety Company of Philadelphia. American Surety Company of New York. Empire State Surety Company. National Surety Company. Fidelity and Deposit Company of Maryland. Another form, even shorter, but in essentials the same, was signed by the Metropolitan Surety Company and is shown here: The undersigned surety company hereby binds itself, its successors and assigns, to pay to the Cambridge Bridge Commission the sum of two thousand (2,000) dollars. This obligation is upon the condition that if the party to the contract hereto annexed, other than the city, shall faithfully furnish and do everything therein required of the party, the obligation shall become of no effect, otherwise it shall continue in full force. Signed, sealed and delivered this January 3, 1907. That we,.. as principal and ... as surety are held and firmly bound unto the Commonwealth of Massachusetts in the sum of..... lawful money of the United States of America, to be paid to the Commonwealth, to which payment, well and truly to be made, we bind ourselves, our respective heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. Whereas, the said principal has made a contract with the Commonwealth, bearing date the..... ....day of.. .1906, for.... Now, the Condition of this Obligation is such that, if the said principal shall in all things stand to and abide by and well and truly keep and perform all the agreements, terms and conditions of said contract on his part to be kept and performed, and shall also pay for all labor performed or furnished, and for all materials used in the carrying out of said contract, then this obligation shall be void; otherwise it shall remain in full force and virtue. In Witness Whereof, we hereunto set our hands and seals this..... day of.... ..in the year nineteen hundred and.... (SEAL) (SEAL) |