From ACT Wiki
Revision as of 13:39, 10 January 2023 by Doug Williamson (Talk | contribs) (Add link.)
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.