4.3.4.5.3 Damages Recoverable Under Payment Bonds

• Jurisdiction: Arizona

As a general rule, in the absence of fraud or overreaching, the measure of damages against the payment bond is the agreed value of the labor or materials furnished under the terms of the contract with the person with whom the claimant dealt.^[106] The claimant also can waive the agreed contract price and attempt to recover for the reasonable value of the labor performed and materials furnished. This claim is called quantum meruit.^[107]

While interest is recoverable on the claim, the time interest commences varies from state to state. The Arizona courts are split on whether interest commences when the principal’s obligation accrues^[108] or from when the surety had sufficient information upon which to make payment.^[109]

Under the Miller...