Bond Definitions
- Surety Bonds – three party agreements in which the issuer of the bond (the surety) joins with the second party (the principal/contractor) in guaranteeing to the third party (the obligee) the fulfillment of an obligation on the part of the principal
- Bid Bonds – provides financial assurance that the bid has been submitted in good faith. A bid bond assures that the contractor will enter into the contract at the bid price. It also assures that the contractor will be able to obtain the required performance/payments bonds
- Performance Bonds – Guarantees the contractor will complete the project per the terms of the contract
- Labor & Material Payment Bonds – assures that the suppliers, laborers, and subcontractors will be paid if the contractor defaults
- Maintenance Bonds – guarantees defective workmanship and materials for a stated period of time
- Subdivision Bonds – local authorities require a guarantee that the landowner completes mandatory public improvements that builders & developer make to their property
- Court bonds – also known as fiduciary bonds; guarantee the performance of fiduciary services in compliance with a court order (e.g. Guardianship Bond, Executor Bond, etc.)
- License and Permit Bonds – required by State and local officials (to engage by a certain business)
- Site Improvement Bonds – Required to ensure public property will be restored upon the completion of a private project
- Supply Bonds – secure payments to suppliers
Last Updated: April 27th, 2010 |
