Form 6.1
Demand Letter for Obligee to Mitigate Damages
Obligee
Address
Re:
(Description of Contract)
Dear [Obligee representative]:
As you know, [Principal] (“Principal”) has acknowledged its default (or otherwise been declared
in default) of the construction contract referenced above. Demand has been made by [Obligee]
(“Obligee”) upon [Surety] (“Surety”) to perform under the terms of the performance bond issued with
respect to said construction contract (“Performance Bond”). Surety does hereby demand that Obligee take
such steps as are reasonably required to mitigate all of its damages.
As an initial response to the above-referenced demand, Surety has tendered a completing
contractor to Obligee. The tendered completing contractor is ready, willing, and able to perform
Principal’s construction contract in all respects, and is prepared to provide a new payment and
performance bond and honor all existing warranty obligations. Obligee’s failure to accept Surety’s tender
of the completing contractor may constitute a breach of Obligee’s duty to mitigate damages and may
impair Obligee’s rights against Surety under the Performance Bond.
In the event Obligee elects to mitigate its damages, as required by law, Obligee should
immediately contact the undersigned to arrange for execution of a tender agreement and a completion
contract.
Surety strictly reserves all rights and defenses available under the Performance Bond, the contract
documents, applicable law, and/or equity. We specifically reserve, without limitation, all rights and
defenses with regard to Obligee’s failure to mitigate its damages with respect to the matters described
herein. Neither this letter nor any response by Surety to the matters described herein constitute an
estoppel, waiver, or modification of any such rights and defenses. Subject to this strict and continuing
reservation of rights and defenses, we look forward to your response.
Should you have any questions or concerns, please do not hesitate to contact the surety.
SURETY
By: