Smalltown contracted with Construction Co. (CC) to repave a street. CC was required to obtain a performance bond, which it did, from Bond Co. While the crew was paving, a distracted driver whizzed by the flagger and crashed into the paving machinery. All three CC employees were injured and hospitalized. Bond Co. performed to Smalltown, and now seeks compensation from the distracted driver. ___________.
A) reimbursement
B) contribution
C) restitution
D) subrogation
E) exoneration

Question

Quizplus · Accepted Answer

Bond Co. has performed to Smalltown, meaning they have fulfilled their obligation to Smalltown under the performance bond. Bond Co. can now seek compensation from the distracted driver through subrogation, which allows them to step into the shoes of Smalltown and pursue any rights or claims Smalltown may have had against the driver.

Smalltown Contracted with Construction Co