Performance bond意思

A performance bond, also known as a performance guarantee or contract bond, is a type of surety bond that is intended to secure the performance of a contractor in accordance with the terms and conditions of a construction contract. The bond is designed to protect the project owner or the party who awards the contract (the obligee) against any loss or damage that may result from the contractor's failure to perform its obligations under the contract.

If the contractor fails to perform as specified, the obligee can make a claim on the performance bond, and the surety company that issued the bond will be required to step in and either complete the work or compensate the obligee for any losses up to the amount of the bond.

Performance bonds are commonly used in construction projects, but they can also be used in other contexts where a party needs to guarantee its performance under a contract. They are typically issued by insurance companies or other financial institutions that specialize in surety bonds.