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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 .
Performance bonds are used in a variety of industries to guarantee that a contract’s obligations are met. They are issued by banks, insurance companies and surety companies and are common in ...
The demand guarantee bridges the "gap of distrust" that exists between the parties. When the bank issues the demand guarantee, the beneficiary deals with a party whose financial strength he can trust and a party which would pay upon first demand regardless of an existing dispute between the parties on the performance of the underlying contract. [5]
A surety bond is defined as a contract among at least three parties: [1]. the obligee: the party who is the recipient of an obligation; the principal: the primary party who will perform the contractual obligation
A retention bond is a form of performance bond or insurance against defects, taken out by the contractor at the request of the client, or by a subcontractor at the request of the contractor, seen as being fairer and more efficient than a cash retention. [19]
For example, in construction a performance bond may secure the satisfactory performance of non-financial obligations. The different types of security interest which can arise and the rights which they confer will vary from country to country .
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In filmmaking, a completion guarantee (sometimes referred to as a completion bond) is a form of insurance offered by a completion guarantor company (in return for a percentage fee based on the budget) that is often used in independently financed films to guarantee that the producer will complete and deliver the film (based on an agreed script, cast and budget) to the distributor(s) thereby ...