Oklahoma Supreme Court: Performance Bond Notice Requirements Are Mandatory

What did the Oklahoma Supreme Court rule about performance bond notice requirements?

The Oklahoma Supreme Court issued a critical ruling in 2025 establishing that notice requirements in performance bonds are mandatory conditions precedent, with significant implications for contractors and project owners.

Case: Flintco, LLC v. Total Installation Management Specialists, Inc.

Issue: Whether a contractor's failure to provide timely notice to the surety relieves the surety from liability under a performance bond.

Holding: The Oklahoma Supreme Court ruled that performance bond notice requirements constitute mandatory conditions precedent. When a contractor or project owner fails to provide required notice to the surety, the surety is relieved from liability under the bond.

Outcome: The court reversed lower court judgments against the surety, finding that the failure to provide timely notice excused the surety's performance obligations.

Legal Principle Established

Notice as Condition Precedent: When a performance bond contains specific notice requirements (such as notifying the surety within X days of default or non-performance), those requirements are not mere procedural formalities—they are substantive conditions that must be satisfied before the surety's obligations are triggered.

Surety's Right to Exercise Options: Timely notice is essential because it allows the surety to exercise its performance bond options, including:

• Taking over and completing the work itself
• Hiring a replacement contractor
• Tendering payment to the obligee
• Investigating the default and determining the least costly remedy

Without timely notice, the surety loses these options and may face increased costs or impossible remediation situations.

Implications for Contractors and Project Owners

Read Bond Terms Carefully: Project owners and general contractors must carefully review performance bond notice provisions and calendar all deadlines. Failure to provide notice can result in losing bond coverage entirely.

Document Default Immediately: When a contractor defaults or fails to perform, obligees must immediately document the default and provide notice to the surety in accordance with bond terms.

Strict Compliance Required: Courts will enforce notice requirements strictly. "Substantial compliance" or "constructive notice" may not be sufficient—obligees must follow the specific notice procedures outlined in the bond.

Multiple Notices: Many bonds require notice at multiple stages (notice of default, notice of intent to make a claim, notice of claim amount). Each deadline must be met independently.

Best Practices

For Project Owners and General Contractors:

• Obtain and review all bond documents at project start
• Calendar all notice deadlines with reminders
• Send notices via certified mail and email to all addresses listed in the bond
• Document when and how notices were sent
• Don't wait to see if problems resolve—provide notice immediately when defaults occur

For Subcontractors:

• Ensure you have current contact information for all sureties
• Keep detailed records of project communications
• If you're the bonded party, maintain good communication with your surety

For Sureties:

• Clearly specify notice requirements in bond forms
• Include multiple acceptable methods of notice (email, certified mail, etc.)
• Provide updated contact information to all parties
• Document any delays in receiving notice

Related Bonds

This ruling applies to all types of performance bonds, including:

• Construction performance bonds
• Subcontractor performance bonds
• Supply contract performance bonds
• Service contract performance bonds
• Public works performance bonds

The principle may also apply to other bond types with notice requirements, including payment bonds, maintenance bonds, and license bonds with claim procedures.