payment bond
- It's a type of guarantee bond that ensures specific parties such as suppliers are paid, should a contractor fail to fulfill a construction contract
- Before starting the construction project, the contractor secured a payment bond as a financial safeguard for the suppliers.
- The construction company had to call upon their payment bond when they failed to complete the building project on time.
- The developer required a payment bond from the subcontractors to ensure coverage for potential contract breaches.
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