A Performance Bond is a guarantee, usually from a bank or surety, that pays the client a defined sum if the contractor fails to perform its contractual obligations. It secures completion and protects the owner against default. On large data-center contracts a performance bond, often around ten percent of the contract value, gives the owner and lenders financial protection given the scale and criticality of the works.
Category: Construction & Project Management · Subcategory: Contracts, Procurement & Commercial Control · Part of the AIDC Technical Terminology reference.