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What is a Performance / Payment Bond?

April 26, 2017Bond payment PERFORMANCE

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What is a Performance / Payment Bond?

1 Answer

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Performance and Payment Bonds are non-cancelable commitments issued by the surety to the owner of the project (obligee). The Performance Bond guarantees that the Contractor will complete the referenced contract within its set terms and conditions. The Payment Bond guarantees that all sub contractors, laborers, and material suppliers will be paid leaving the project lien free.