Performance bond: Difference between revisions
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imported>Doug Williamson (Expand 1st sentence.) |
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* [[Guarantee]] | * [[Guarantee]] | ||
* [[Indemnity]] | * [[Indemnity]] | ||
* [[Nature performance bond]] | |||
* [[Performance]] | * [[Performance]] | ||
* [[Retention bond]] | * [[Retention bond]] | ||
Revision as of 13:39, 10 January 2023
Trade finance.
A performance bond is an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract.
Such a bank bond or insurance company bond will be supported by an indemnity issued by the supplier in favour of the bank or insurance company.
A performance bond can be called by the buyer in the event of any contract delays or defects in the supplier's performance of the contract.
Also known as a performance guarantee.
