performance bond

Definition of "performance bond"
  1. A type of surety bond that serves as a guarantee to a property owner (like a developer or a government authority), ensuring the completion of a construction project or the payment of compensation up to the bond's limit in case the contractor fails to fulfill the contract terms. This is sometimes also known as a completion bond
How to use "performance bond" in a sentence
  1. Before commencing the construction project, the contractor provided a performance bond to the city.
  2. The developer required a performance bond from the construction company to ensure the project's completion.
  3. If the contractor fails to complete the work as agreed, the performance bond may be claimed by the developer.

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