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