performance bond

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Performance bond

A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement.

Performance Bond

A bond that a company issues to another guaranteeing repayment in case some project fails. For example, suppose a company hires a construction firm to build an apartment building. The construction firm may issue a performance bond to the company. If the apartment building is not constructed according to specifications, the company will not incur any losses because the construction company must repay the bond. This reduces the risk to the bondholder that another party to a contract will not fulfill its obligations.

performance bond

An insurance policy often required on government construction projects.If the contractor does not perform the work it contracted to do, the insurance company will either hire someone else to complete the job or will pay off the resulting damages, up to policy limits. Sometimes it is inaccurately called a performance and completion bond. Technically, liability under a performance bond is contingent on the contracting party paying according to the terms of its construction contract.Contrast with completion bond,where the contracting party does not have to pay anything to the insurance company,even though it might have been obligated to pay the contractor. As a result, most bonds are performance bonds and it is very difficult to obtain a completion bond.

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Sakaiya made these remarks in reference to moves among senior LDP legislators to revise the fiscal law, which limits the use of the proceeds from construction bonds to public works projects.
EDS: UPDATING WITH LDP HEAVYWEIGHT NONAKA'S NEWS CONFERENCE REMARKS) Prime Minister Yoshiro Mori on Friday indicated his qualified support for a ruling Liberal Democratic Party (LDP) plan to change the law to allow the use of construction bonds to fund outlays on projects other than public works.
At the meeting of the panel, which has been reviewing the government's public works spending, many members expressed the view that since the scope of purposes for which construction bonds may be issued is limited, it is impossible to drastically change budget appropriations, the officials said.
New Jersey Economic Development Authority (NJ) school facilities construction bonds series 2006 R-1;
8 million in additional construction bonds six years ahead of schedule.
The bonds are secured by an assignment of the lease, sublease, sublease guarantees and leasehold mortgage to the trustee, a security interest in the construction fund, mortgage title policies, an assignment of the construction bonds and an assignment of the agency agreement.
6 billion in right-of-way acquisition and bridge construction bonds.
2 billion Proposition A/AA construction bonds, which were approved by voters in 2001 and 2003.
NEW YORK -- Fitch Ratings assigns an 'A+' rating to the New Jersey Economic Development Authority's (the authority) approximately $675,000,000 school facilities construction bonds in two series.
NEW YORK -- Fitch Ratings assigns a rating of 'AAA' to the State of Florida Full Faith and Credit Department of Transportation right-of-way acquisition and bridge construction bonds $163,610,000 series 1997A maturing July 1, 2008-2027 and $121,185,000 series 1997B, maturing July 1, 2008-2027, based on an escrow fund invested in direct U.
NEW YORK -- Fitch Ratings assigns an 'A+' rating to New Jersey Economic Development Authority's (the authority) approximately $750,000,000 school facilities construction bonds 2005 series O expected on Sept.
Florida's full faith and credit right-of-way acquisition and bridge construction bonds are payable primarily from pledged motor and diesel fuel taxes that are transferred to the state transportation trust fund (STTF) and then to the right-of-way acquisition and bridge construction trust fund.

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