What is a Contract Bond: Bid/Performance/Payment Bond?
“Contract Bond” is the general term for surety bonds relating to bids, job completion, and payment of bills for labor and materials. These would include a Bid Bond (guarantees that the contractor who is awarded the bid will sign the contract based on his bid and qualify for a Performance Bond), a Performance Bond (guarantees job completion according to building plans and specifications), and a Payment Bond (guarantees that labor and material bills will be paid). Contract bonds are usually required for public projects and for many private projects.
