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performance bond

A performance bond guarantees that the contractor will perform the work in accordance with the construction contract and related documents, thus protecting the owner from financial loss up to the bond limit (called the penal sum) in the event the contractor fails to fulfill its contractual obligations.

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Similar to an insurance policy limit, the penal sum represents the maximum amount a surety company...

A surety bond is a contract under which one party (the surety) guarantees the performance of...