Performance Bond
A bond issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract. Investopedia Says:
For example, a contractor may issue a bond to a client for whom a building is being constructed. If the contractor fails to construct the building according to the specifications laid out by the contract, the client is guaranteed compensation for any monetary loss. Related Terms:
Bank Guarantee
Bankers' Acceptance
Bond
Guaranteed Investment Contract - GIC |