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A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. The term is also used to denote a collateral deposit of good faith money , intended to secure a futures contract , commonly known as margin .
Construction of the Pentagon, 1942.. The Miller Act (ch. 642, Sec. 1-3, 49 stat. 793,794, codified as amended in Title 40 of the United States Code) [1] requires prime contractors on some government construction contracts to post bonds guaranteeing both the performance of their contractual duties and the payment of their subcontractors and material suppliers.
Construction in East Village, San Diego. A "Little Miller Act" is a U.S. state statute, based upon the federal Miller Act, that requires prime contractors on state construction projects to post bonds guaranteeing the performance of their contractual duties and/or the payment of their subcontractors and material suppliers.
"As I assume you are aware, the performance bonds and payment bonds apply to two separate and distinct obligations of the contractor and are subject to the terms of the bonds, the Texas Government ...
A bond may become worthless if the issuer defaults on the payment of the bond — such as when a company that issued a bond goes bankrupt. As such, it can pay to go with investment-grade bonds ...
Advantages of corporate bonds. Regular cash payment. Bonds make regular cash payments, an advantage not always offered by stocks. That payment provides a high certainty of income. Less volatile price.
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