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Definitions from WordNet

Definitions from the Web

Performance Bond

Definition

A performance bond is a type of surety bond that guarantees the satisfactory completion of a project or fulfilling of obligations as agreed upon by a contractor or a party. It provides financial protection to the project owner in case the contractor fails to perform according to the terms and conditions of the contract.

Senses

Sense 1: Construction Industry

• Noun: A legal agreement between a contractor and a project owner, where the contractor provides a bond ensuring the completion of the project as per the contract terms.
• Sample Sentence 1: The construction company provided a performance bond to guarantee the timely completion of the new office building.
• Sample Sentence 2: The government requires a performance bond from contractors bidding on large infrastructure projects.

Sense 2: Financial Industry

• Noun: A type of financial guarantee provided by an insurance company or a bank to ensure the fulfillment of financial obligations by a borrower.
• Sample Sentence 1: The bank required a performance bond from the borrower to secure the loan for the new business venture.
• Sample Sentence 2: The investor received a performance bond from the company to ensure the repayment of the invested capital with interest.

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