{"id":11839,"date":"2018-01-05T04:04:22","date_gmt":"2018-01-05T04:04:22","guid":{"rendered":"https:\/\/reunitethestates.org\/?page_id=11839"},"modified":"2018-01-05T04:55:57","modified_gmt":"2018-01-05T04:55:57","slug":"performance-bond-a-contractors-bond-which-guarantees-that-the-contractor-will-perform-the-contract-and-usually-provides-that-if-the-contractor-defaults-and-fails-to-complete-the-contract-the-sur","status":"publish","type":"page","link":"https:\/\/reunitethestates.org\/?page_id=11839","title":{"rendered":"Performance Bond – a contractor’s bond which guarantees that the contractor will perform the contract, and usually provides that if the contractor defaults and fails to complete the contract, the surety can itself complete the contract or pay damages up to the limit of the bond"},"content":{"rendered":"

performance bond<\/span>:<\/strong><\/span>
\n(1918)<\/span><\/p>\n

1. A bond<\/a> given by a surety to ensure the timely performance of a contract.\u00a0 *\u00a0 In major international agreements, performance bonds are typically issued by banks, but sometimes also by insurance companies.\u00a0 The face amount of the bond is typically 2% of the value of performance, but occasionally as much as 5%. <\/span><\/strong><\/p>\n

2. A third party’s agreement to guarantee the completion of a construction contract upon the default of the general contractor.<\/strong> \u2014 aka comple<\/strong><\/em><\/span>tion bond<\/strong><\/em><\/span>; surety bond<\/strong><\/em><\/span>; contract <\/strong>bond<\/em><\/span>.\u00a0 Cf. common-law bond<\/em> under BOND (2). [1]
\n<\/span><\/span><\/p>\n

1. A type of contractors’ bond; a bond<\/a> which guarantees that the contractor will perform the contract, and usually provides that if the contractor defaults and fails to complete the contract, the surety can itself complete the contract or pay damages up to the limit of the bond.\u00a0 17 Am J2d Cont Bond \u00a7 1<\/span>.<\/strong> [2]<\/span><\/p>\n

1. A surety bond which guarantees that the contractor will perform the contract; it usually provides that in the event of default the surety must either complete the contract or pay liquidated damages<\/a> or a penalty in the amount of the bond.<\/span><\/strong>
\n\u00a0\u00a0\u00a0\u00a0 See indemnity bond<\/em>; penal bond<\/em>. [3]<\/span><\/p>\n

Types of Surety Bonds:<\/span><\/strong><\/p>\n

\n

nonoperative performance bond<\/span>:<\/strong><\/span> (1999) A performance bond that is not currently in effect but is activated upon the issuance of the buyer\u2019s letter of credit or other approved financing.<\/strong><\/span><\/p>\n

operative performance bond<\/span>:<\/span><\/strong> (1999) A performance bond that has been activated by the issuance of the buyer\u2019s letter of credit or other approved financing.<\/strong><\/span><\/p>\n

revolving performance bond<\/span>:<\/strong><\/span> (1980) A performance bond that is in effect on a continuing basis for the duration of the contract, usu. plus an additional number of days (often 45).<\/strong><\/span><\/p>\n

up-front performance bond<\/span>:<\/strong><\/span> (1998) A performance bond given before the issuance of the buyer\u2019s letter of credit or other financing.<\/strong><\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

performance bond: (1918) 1. A bond given by a surety to ensure the timely performance of a contract.\u00a0 *\u00a0 In major international agreements, performance bonds are typically issued by banks, but sometimes also by insurance companies.\u00a0 The face amount of the bond is typically 2% of the value of performance, but occasionally as much as … Continue reading Performance Bond – a contractor’s bond which guarantees that the contractor will perform the contract, and usually provides that if the contractor defaults and fails to complete the contract, the surety can itself complete the contract or pay damages up to the limit of the bond<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":11848,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-11839","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/pages\/11839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reunitethestates.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11839"}],"version-history":[{"count":1,"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/pages\/11839\/revisions"}],"predecessor-version":[{"id":11841,"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/pages\/11839\/revisions\/11841"}],"up":[{"embeddable":true,"href":"https:\/\/reunitethestates.org\/index.php?rest_route=\/wp\/v2\/pages\/11848"}],"wp:attachment":[{"href":"https:\/\/reunitethestates.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}