performance bond

performance bond
A type of insurance purchased by a builder that protects both the bank and the owner by providing that the insurance company will be responsible for completing construction if the contractor fails to do so. American Banker Glossary
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A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement. Bloomberg Financial Dictionary
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The amount of money or collateral deposited by a client with his broker, or by a clearing firm with CME Clearing on open futures or options contracts before a customer can trade. The performance bond is not a part payment on a purchase.1. Initial performance bond is the total amount of margin per contract required by the broker when an account is opened, or when the equity in the account falls below CME Clearing minimum maintenance requirements.2. Maintenance performance bond is a sum which must be maintained on deposit at all times. If a customer's equity in any futures position falls below the maintenance level because of adverse price movement, the broker must issue a margin call to the minimum CME Clearing initial margin requirement to restore the customer's equity. Consult the Contract Specifications for margin requirements of specific contracts. Chicago Mercantile Exchange Glossary

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performance bond performance bond ➔ bond

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performance bond UK US noun [C]
► LAW CONTRACT BOND(Cf. ↑contract bond)

Financial and business terms. 2012.

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Look at other dictionaries:

  • performance bond — see bond 1a Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. performance bond n …   Law dictionary

  • Performance bond — A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. A job requiring a payment performance bond will usually require a bid bond, to bid the job. When the… …   Wikipedia

  • performance bond call — 1 A request from a brokerage firm to a customer to bring performance bond deposits up to minimum levels. 2 A request by CME Clearing to a clearing firm to bring clearing performance bonds back to levels required by the Exchange Rules. Most… …   Financial and business terms

  • performance bond — A type of contractors bond; a bond which guarantees that the contractor will perform the contract, and usually provides that if the contractor defaults and fails to complete the contract, the surety can itself complete the contract or pay damages …   Ballentine's law dictionary

  • performance bond — noun a bond given to protect the recipient against loss in case the terms of a contract are not filled; a surety company assumes liability for nonperformance • Syn: ↑surety bond • Hypernyms: ↑bond, ↑bond certificate …   Useful english dictionary

  • performance bond — noun A contractors bond, guaranteeing that the contractor will perform the contract and providing that, in the event of default, the surety may complete the contract or pay damages up to the bond limit …   Wiktionary

  • Performance Bond — A bond issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract. For example, a contractor may issue a bond to a client for whom a building is being constructed. If the… …   Investment dictionary

  • performance bond. — See contract bond. [1935 40] * * * …   Universalium

  • performance bond — noun a bond issued by a bank or other financial institution, guaranteeing the fulfilment of a particular contract …   English new terms dictionary

  • performance bond — A guarantee given to customers in some industries that goods will be delivered to a specific standard. The bond is normally given by a company s bankers, who are indemnified by the company …   Accounting dictionary

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