Which of the following best explains 'Performance bond'?

Name: Which of the following best explains 'Performance bond'?
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Question

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A performance bond is a written guarantee from a third party guarantor (such as a bank or insurance company) that ensures a contractor will complete a project as agreed upon in a contract. In the event that the contractor fails to meet the terms of the contract, the bond can be used to compensate the client for any financial losses incurred.

Which of the Following Best Explains 'Performance Bond