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Performance Bond basics

When you're investing in a complex project, a Performance Bond ensures that your contractor gets the job done right-or you get paid. You never know what will come up over the course of a construction project. Improve the odds that you won't be left out in the cold with a Performance Bond.

Use the Performance Bond document if:

  • You're a project owner who wants reassurance when hiring a contractor.
  • You're a contractor who's asked to provide a little security.

When you hire a construction contractor, you're taking a risk. Getting a Performance Bond can give you some peace of mind. Even if a contractor has glowing references, there's no guarantee that all will go according to plan. What if the contractor falls behind schedule? Does shoddy work? Goes bankrupt? Who's going to pay for your loss of income? With a Performance Bond, a surety company will pay you a specified amount when the job goes awry. If you're a contractor, a Performance Bond shows that you're backing your work with a financial guarantee. References and promises only go so far. A Performance Bond shows an owner that you believe in your work. Whether you're the project owner or the contractor, a Performance Bond can help pad an agreement.

Other names for this document: Performance Bond Form, Payment and Performance Bond, Construction Performance Bond

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Sample Performance Bond

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