This article governs cancellation of or withdrawal of a surety from a bond given other than in an action or proceeding.
Bonds and UndertakingsCancellation of Bond Or Withdrawal of Sureties
Section § 996.310
This section explains the rules about how a surety - that’s someone who promises to pay if another person doesn’t - can either cancel or withdraw from a bond that wasn’t part of a court case or legal proceeding.
surety bond cancellation withdrawal
Section § 996.320
If you've agreed to be a surety on a bond (meaning you guarantee someone else's obligation), you can cancel or withdraw from this commitment by notifying the relevant official, in the same way, you originally provided the bond. You must also send a copy of this cancellation or withdrawal notice to the person you are backing, known as the principal.
A surety may cancel or withdraw from a bond by giving a notice of cancellation or withdrawal to the officer to whom the bond was given in the same manner the bond was given, notwithstanding Section 995.030. The surety shall at the same time mail or deliver a copy of the notice of cancellation or withdrawal to the principal.
surety cancellation withdraw from bond notice of cancellation
Section § 996.330
This law explains the conditions under which a surety's (a guarantor's) cancellation or withdrawal becomes effective. It happens on the earliest of three possible dates: 30 days after notice is given, when a new surety takes over, or when a new bond is issued.
Cancellation or withdrawal of a surety is effective at the earliest of the following times:
(a)CA Civil Procedure Code § 996.330(a) Thirty days after notice of cancellation or withdrawal is given.
(b)CA Civil Procedure Code § 996.330(b) If a new surety is substituted for the original surety, the date the substitution becomes effective.
(c)CA Civil Procedure Code § 996.330(c) If a new bond is given, the date the new bond becomes effective.
surety cancellation withdrawal of surety notice of cancellation
Section § 996.340
If a person doesn't provide a new bond within 30 days after their original bond is canceled or withdrawn, they lose all benefits from having that bond. This means any office linked to the bond is empty, any official commission is canceled, and any related license or registration is put on hold. You can't run your business with a suspended license or registration, and to get it back, you need to provide a new bond during the time your license or registration is still active.
(a)CA Civil Procedure Code § 996.340(a) If the principal does not give a new bond within 30 days after notice of cancellation or withdrawal is given, all rights obtained by giving the original bond immediately cease, any office for which the bond is given is vacant, any commission for which the bond is given is revoked, and any license or registration for which the bond is given is suspended.
(b)CA Civil Procedure Code § 996.340(b) A person whose license or registration is suspended shall not operate or carry on business pursuant to the license or registration during the period of suspension. A license or
registration that is suspended may be revived only by the giving of a new bond during the license or registration period in which the cancellation or withdrawal occurred.
new bond requirement bond cancellation license suspension
Section § 996.350
If a surety, which is a person or company that guarantees a bond, pulls out from a bond, you don't need a new bond as long as this doesn’t lower the bond amount or number of sureties below what's legally required.
If the withdrawal of a surety does not reduce the amount of the bond or the number of sureties below the minimum required by the statute providing for the bond, no new bond is required or necessary to maintain the original bond in effect.
surety withdrawal bond amount minimum required
Section § 996.360
If a surety decides to cancel or step away from a bond, the bond still applies for anything that happened before that point. The surety won't be responsible for anything that occurs after they leave. The bond will still be valid for any other sureties who remain involved.
If a surety cancels or withdraws from a bond:
(a)CA Civil Procedure Code § 996.360(a) The bond remains in full force and effect for all liabilities incurred before, and for acts, omissions, or causes existing or which arose before, the cancellation or withdrawal. Legal proceedings may be had therefor in all respects as though there had been no cancellation or withdrawal.
(b)CA Civil Procedure Code § 996.360(b) The surety is not liable for any act, default, or misconduct of the principal or other breach of the condition of the bond that occurs after, or for any liabilities on the bond that arise
after, the cancellation or withdrawal.
(c)CA Civil Procedure Code § 996.360(c) The cancellation or withdrawal does not affect the bond as to the remaining sureties, or alter or change their liability in any respect.
surety cancellation bond withdrawal liabilities before cancellation
