Performance bonds

Published: January 0001

Pages: 4

BESA Product Code: LC 63

There are three collateral arrangements that can be used to secure the performance of the obligations undertaken by you. This issue focuses on the use of performance bonds (parent company guarantees and retentions are dealt with elsewhere).

Remember, under most forms of contract, if you fail to perform, the Beneficiary will have recourse to a retention fund in addition to his other contractual remedies, such as set-off and arbitration. A bond therefore gives the Beneficiary additional security for your performance.