Where a Bid Bond ensures the “good faith” of a Contractor’s work-bid, a Performance Bond ensures monetary compensation to the client in the event the Contractor fails to finish the project according to the specifications laid out by the contract (most often due to the default or bankruptcy of the contractor).

Contract (or Construction) Bonds can drive a Contractor crazy, especially if that contractor is dealing with a municipality. However, despite most contractors familiarity with construction bonds,