A bid bond is provided by a contractor in a competitive bidding situation as a means of...
surety bond
A surety bond is a contract under which one party (the surety) guarantees the performance of certain obligations of a second party (the principal) to a third party (the obligee).
Additional Information
For example, construction contractors are often asked to provide a variety of surety bonds guaranteeing their promise to enter into a contract at the bid price (bid bond), their completion of the contract (performance bond), or the delivery of a project free of liens (payment bond).
Related Terms
A performance bond guarantees that the contractor will perform the work in accordance with the...
A payment bond guarantees that suppliers and subcontractors will be paid for materials and labor...
