Balance Sheet- detailed listing of business's assets and liabilities, representing its financial status at a particular time

Bond- three party agreement in which one party, called the surety, obligates itself to a second party called the obligee, to answer for the default for the third party, called the principal

Bonding Capacity- total value of bonds the surety will underwrite for a particular contractor, based on the Surety's analysis of the total volume of work that contractor can support

Cash Flow- origins and uses of a business's cash funds during a particular time period

Change Order- written document, from owner to contractor, issued after the effective date of their agreement, authorizing contractor to alter the work in a defined manner

Character- principal's personal traits, e.g., moral integrity, conscience, surety uses to evaluate risks in prospective bonding

Collateral- anything of value the principal pledges to protect the interests of the surety.  It is usually in the form of cash, or cash equivalents (ILOC's, CD's, assignment of savings accounts, etc.), or real estate

Contract Balance- portion of contract funds remaining to be paid to the principal to complete the bonded project

Contract Over-run- amount by which the contract price, from additional cost from change orders, exceeds the original contract price

Contract Under-run- amount by which the final contract price, from deductive change orders, is less than the original contract price

Credit- ability of a business to borrow money

Critical Path-

Defective work- work not in compliance with the contract documents

Delay claim- contractor's claim that the project was not completed as scheduled because the owner caused, by numerous change orders, the contractor's delay

Exonerated

Financial Statement- written document recording the financial operations of a business for a defined period

General Conditions- portion of the contract documents defining and describing the rights and responsibilities of the parties to the contract

Indemnify

Indemnitor

Indemnity Agreement- contract entered into between the indemnitor and the surety, in which the indemnitor secures the surety against loss the surety may sustain to another (often referred to as the General Indemnity Agreement "GIA")

Lien Release-

Liquidated Damages-

Liquidated Damage Clause- a provision in the contract defining the amount of liquidated damages the contractor must pay to the obligee if the work is not completed within the contract terms

Lowest Responsible Bidder-

Mechanics lien- charge on real property in favor of parties supplying labor, materials, or professional services for a construction project, for the value of the labor, materials, or professional services they supply; the lien prevents the owner from obtaining clear title until the claim is settled and the lien removed

Negotiated contract- agreement for a construction contract without competitive bidding whereby the two parties negotiated specifications and terms

Net Quick- (also "working capital") current assets exceeding current liabilities

Obligee- the party that the bond secures against loss

Overhead- business expenses, e.g., rent, insurance, heating, required for continuing operation of a business

Penal Sum- (also "bond penalty") maximum amount for which the surety is held liable under its bond

Pre-Bid Conference- meeting held between the owner and prospective contractors before bidding, allowing the contractors to familiarize themselves with the project and to learn any of the owner's further requirements

Premium- cost of the surety bond

Prime Contract- agreement between the owner and the general contractor 

Principal- the party primarily liable under a bond of suretyship

Profit and Loss Statement- financial statement showing contractor's profits and losses for a defined period 

Progress Payment- money paid by the obligee to the contractor, according to the contract, based on the progress to date on the project

Punch List- list that is made near the completion of the project indicating items the contractor must do to complete the work in accordance with the contract

Reletting Contractor- contractor to whom the surety reissues a project if the original contractor defaults

Retainage- a percentage of the contract balance held by the obligee for payment to the contractor on completion of the contract

Schedule of Values- document showing the amount of the total contract sum to be allocated to each phase; obligee gives this schedule to the architect or engineer who uses it to evaluate the contractor's application for payments

Site Conditions- those conditions at the site of the project that may affect the contractor's ability to successfully complete the project

Special Conditions- additions to the general conditions of the contract documents; these define and describe requirements peculiar to a particular project 

Specialty Contractor- one who's business is a specialty trade, e.g., heating and cooling, plumbing

Specification- (also "specs") complete, detailed written description of all the materials and work required to complete a project

Standard Provisions- conditions and requirements which are common to many projects; a part of the contract documents

Statute of Limitations- a law establishing a period within which a specific legal action must be taken

Stop Notice 

Subcontract-

Substantial Completion- the point at which the engineer states in his certificate of substantial completion, that the work is sufficiently complete, as defined in the contract documents, to be utilized for its intended purpose

Take Off- estimating the amount of material needed for a particular project

Timely Completion- finishing work on or before the time designated in the contract documents

Warranty- promise that what is asserted is true

Warranty Period- (also "maintenance period") period of time defined in the contract, after the contractor completes the project and the owner accepts it, during which time the contractor must provide maintenance

Work on Hand-