Contract Bonds include a category of Surety bonds, which guarantees the fulfillment of contractual obligations. Some of these Surety Bonds include:
A Bid Bond guarantees the bidder will actually enter into the contract at the bid price stated and will provide the required performance and payment bonds to the owner.
The Payment Bond protects most providers of material and labor to a job. It guarantees the contractor will pay bills in accordance with the contract terms.
A Performance Bond protects the owner from financial loss caused by the contractor who fails to complete the project in accordance with the terms, specifications and conditions of the contract for construction.