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| gen. |
contract performance bond (A written guaranty from a third party guarantor (usually a bank or an insurance company) submitted to a principal (client or customer) by a contractor on winning the bid. A performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract. Performance bonds usually cover 100 percent of the contract price and replace the bid bonds on award of the contract. Unlike a fidelity bond, a performance bond is not an insurance policy and (if cashed by the principal) the payment amount is recovered by the guarantor from the contractor. Also called standby letter of credit, contract performance bond. Read more:  businessdictionary.com Alexander Demidov) |
| law |
performance bond (A contractor's bond, guaranteeing that the contractor will perform the contract and providing that, in the event of default, the surety may complete the contract or pay damages up to the bond limit. WT Alexander Demidov) |
