performance bond

[per-fawr-muhns bond]

noun

1. an indemnity agreement or bond, usually issued by a bank or insurance company, to protect against loss due to breach of contract.

performance bond

noun

1. a bond given by a bank to a third party guaranteeing that if a specified customer fails to fulfil all the terms of a specified contract, the bank will be responsible for any loss sustained by the third party

Word History and Origins

Origin of performance bond¹

First recorded in 1935–40

Example Sentences

Nonetheless, Lebo said the tiles are under warranty and a contractor’s performance bond remains in effect, two possible though difficult avenues to reimburse transit taxpayers.

Read more on Seattle Times

Companies that drill or operate gas and oil wells must pay a performance bond to the state, but the bond typically is returned when a well changes hands.

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The performance bond for the Thirty Meter Telescope International Observatory was essentially litigated during the project’s contested case hearing, Nakamura’s ruling said.

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The standards include a required performance bond to keep teams from jumping ship midseason.

Read more on The Guardian

The Department of Finance and Administration said Tuesday the businesses have each paid their $15,000 licensing fees and posted their $100,000 performance bond.

Read more on Washington Times