Tennessee Performance Bond25% of Contract, Not 100%.

Because Tenn. Code Ann. § 12-4-201 sets the bond floor at 25% of the contract price for public works exceeding $100,000 — not 100%, which is what most states require under their own "little Miller Act." On a $400,000 county or municipal contract, the statutory minimum bond is $100,000 (25% of $400,000). Compare that to a 100%-of-contract state, or a federal Miller Act job under 40 U.S.C. § 3131, where the same $400,000 contract would require a $400,000 bond. The lower penal sum means less of your bonding capacity is tied up per job, which matters most to contractors running several public jobs at once.

No. Tenn. Code Ann. § 12-4-201 governs contracts let by "any city, county or state authority" for general public works, but TDOT highway and bridge contracts bond under a completely separate statute — Tenn. Code Ann. § 54-5-119. That statute doesn't set a fixed percentage; it lets the department itself fix the bond amount, conditioned on both faithful performance of the contract and payment for labor and materials. TDOT's own standard contract bond forms have historically required bonding at the full contract price rather than the 25% floor that applies to county and municipal work — always confirm the amount TDOT specifies in your actual contract documents, since the statute gives the department discretion rather than a hard percentage.

Not under state law. Tenn. Code Ann. §§ 12-4-201 through 12-4-206 explicitly state they "shall not apply to contracts of one hundred thousand dollars ($100,000) or less." Below that trigger, the awarding city, county, or state authority has no statutory obligation to require a bond — though many local governments write one into their own bid specifications anyway as a matter of contract, especially for first-time bidders. Read the bid documents, not just the statute: an awarding authority can always require more than the law demands, just never less on a contract that exceeds $100,000.

Two deadlines, both strict. First, Tenn. Code Ann. § 12-4-205 requires anyone owed money for labor or materials to send written notice — by certified mail return receipt or personal delivery — to the contractor who executed the bond or to the public official who awarded the contract, within 90 days after the public work is completed. For municipal projects, notice to the mayor is sufficient; for county projects, notice to the county mayor; for state projects, notice to the governor. Second, Tenn. Code Ann. § 12-4-206 gives claimants only six months after project completion to actually file suit to enforce the bond. Miss either deadline and the claim is gone, regardless of whether the money is genuinely owed.

No, and confusing the two is the most common mistake we see. A Tennessee performance bond under § 12-4-201 is project-specific — it exists only because you won one particular public contract over $100,000, and it expires when that job is done. It has nothing to do with your contractor license. Separately, Tennessee requires most home improvement contractors working $3,000-$24,999 residential jobs to carry a $10,000 license bond through the Board for Licensing Contractors before they can legally operate — see our Tennessee contractor license bond page for that requirement. A commercial general contractor license itself typically carries no bond requirement; the license bond and the performance bond serve entirely different purposes and neither substitutes for the other.

No — Tennessee has no statute requiring performance bonds on private construction. Bonding on private work is purely contractual between the owner and contractor. Where bonds do show up on private Tennessee jobs is Tenn. Code Ann. § 66-11-124, part of the state's mechanics' and materialmen's lien law: a private owner can record a payment bond equal to 100% of the prime contractor's contract price with the county register of deeds, which waives remote subcontractors' and suppliers' lien rights against the property. That's a lien-waiver tool for owners, not a performance guarantee, and it only appears when the owner chooses to use it.