What is executed in connection with a contract and secures the performance and fulfillment of all the undertakings, covenants, terms, conditions and agreements contained in the contract?
APerformance Bondis a type of surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. In connection with a contract, a performance bond secures the performance and fulfillment of all the undertakings, covenants, terms, conditions, and agreements contained in the contract. This ensures that if the contractor fails to complete the project asper the contract, the owner is compensated by the bond issuer for the financial losses incurred. This bond is crucial in construction and large projects to protect the client against the risk of contractor default.
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