performance bond

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Related to performance bonds: Contract Bonds, Bid Bonds

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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The matter was taken to court and the judge ordered CCEL to make a payment of PS420,000, equivalent to the financial value of the performance bond.
According to the new law, the 10% performance bond exemption included in the previous law can now be granted to contracts with a total value of less than $136,132; these also include contracts comprising the commencement of work or provision of consulting services.
The Nature of the Performance Bond under Qatari Law
Reality: It costs the same amount of money to obtain a payment bond as it does to obtain a performance bond.
He said the blame for not checking the relationship between the contractor and the company issuing the performance bond lies with the town, but legal avenues for recovering the town's funds are being explored.
The study results suggest that the minimum contract value that requires a performance bond should be raised to between $1 million and $10 million and that the cost of performance-based prequalification is low compared to the cost of the premiums for performance bonds.
The company's business exclusively comprises the issuance of residential performance bonds designed to replace the cash deposit traditionally made when contracts are exchanged between parties during the purchase of residential property in the United Kingdom.
The Fund will facilitate stock purchasing, project finance and also provide short term loans to SMEs to provide cash collateral to support performance bonds issued by banks for domestic and export contracts.
Fireman's Fund Insurance Company(R) has issued a broad statement nationwide alerting customers, agents, engineers and contractors to the possibility of fraudulent surety performance bonds being marketed under the name of Fireman's Fund Insurance Company or National Surety Corporation for projects related to reconstruction following Hurricane Katrina.
At settlement, the Redemption JV must also provide cash security for the replacement of existing performance bonds totaling AUS$1.

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