Bond
- November 26, 2024
- Posted by: [email protected]
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BOND
In the course of business, contractors are often times required to produce a bond as a guarantee of performance in lieu of the market practice of pa retention. In the event of non-performance the client or Principal is entitled to call upon this bond for the full amount mentioned therein. The bond issue shall recover said amount from the contractor and its guarantors.
TENDER BOND
A bond that is required during the submission of a tender for a contract. This bond is to guarantee that the contractor will undertake the contract at the tendered terms and conditions if successful in winning the contract.
PERFORMANCE BOND
A bond that is required after the successful award of the contract and within 14 days of receipt of the Letter of Award. This is to guarantee the contractor will fulfil all obligations under the contract at the agreed terms and within the stipulated time frame
ADVANCE PAYMENT BOND
A bond that acts as security for the advance on progress payment from the Principal, to guarantee that the contractor will fulfil his contractual obligations in progressing the project after receipt of said monies. Advance payment is usually recouped by deducting a portion of the scheduled progress payments
SUPPLY BOND
A bond that acts as security to guarantee that the supplier will fulfil his obligations to deliver his products or services on the agreed contractual terms. This bond will reimburse the purchaser should the supplier default on the contract.