bid bond
- A type of guarantee, often used in construction contracts bidding processes, to ensure that the winning bidder will take on the project and also provide a guarantee of project completion, typically in the form of a performance bond
- As part of the bidding process, the contractor was required to submit a bid bond to ensure financial security and guarantee project completion.
- A bid bond is provided as a show of good faith that a contractor will fulfill their obligations if their proposal is selected.
- If a contractor fails to honor their contractual obligations, the bid bond can be used to financially cover the cost of selecting another contractor.
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