Contracts
In Delaware, what is a 'performance bond' in construction contracts?
AA bond posted by the buyer guaranteeing they will perform the purchase
BA bond posted by a contractor guaranteeing they will complete the construction project — if the contractor fails, the bonding company completes the work or compensates the owner✓ Correct
CA bond posted by the seller guaranteeing the property will appraise at value
DA government bond financing public construction projects
Explanation
A performance bond is a surety bond from an insurance/bonding company guaranteeing a contractor will complete a construction project as specified. If the contractor defaults, the bonding company ensures project completion or pays the owner's damages. Delaware government projects and many private developments require performance bonds, providing significant protection for property owners and developers.
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