Performance security

A financial guarantee that a contractor will perform as set out in the contract. If the contractor does not meet its performance obligations, then the purchaser can access the performance security to remedy the defect. The most common form of performance security is a performance bond, but it can take other forms such as an irrevocable letter of credit. Generally associated with construction projects, performance security can be useful in other contracting scenarios where performance and project completion are critical success factors. 

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