Performance Bond

A performance bond is a financial guarantee ensuring that contractual obligations will be fulfilled, typically issued by a bank or insurance company.


Bond StructureDetails
AmountPercentage of contract value
IssuerBank or insurance company
BeneficiaryParty protected by bond
Validity periodDuration of coverage
Call conditionsWhen bond can be claimed
Real Estate ApplicationsUse
Construction contractsEnsure project completion
Construction contractsProtect buyer deposits
Lease guaranteesTenant performance security
Service contractsFacility management commitments

Related Terms

GuaranteeSecurity DepositDeveloper Obligations Contract Performance

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