It would be beneficial to have performance bonds from contractors. But, first things first; performance bonds are legally binding contracts that involve three parties. They are issued to ensure that one of the parties complies with the terms mentioned in the contract. The three parties involved are the Obligee, who benefits from the performance bond, the Obligor who is generally the contractor obligated to perform according to the contract, and the Surety Agency which produces the bond and makes it official.
There are several different reasons why you should ask contractors for a performance bond and the reasons are solely based on guaranteeing performance in all its aspects (hence, the name performance bond).…Continue reading