A Performance Bond is a written guaranty from a third party guarantor issued by a contractor or supplier to an owner to protect against loss in the event of default on a contract. The Performance Bond ensures the repayment to the owner when the contractor fails to meet the project obligation or contractual requirement that is usually outstanding for the full duration for the project, and the obligation to pay money is commonly capped at 10% of the contract price. (Refer to the Performance Guarantee)
Related Definitions in the Project: The Bond and Insurance; Project Management; Operation and Maintenance; Construction
