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.

From 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.

From Washington Times

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

From Washington Times

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

From 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.

From Washington Times