A performance bond is a financial guarantee issued by a third party, typically a bank or insurance company, ensuring that a contractor will fulfill their obligations as stipulated in a contract. If the contractor fails to perform satisfactorily, the bond provides compensation to the project owner for any resulting financial losses or project completion costs.
4. Performance Bond (1) Within five days from the date of signing this agreement, Party B shall pay Party A a performance bond equivalent to the 2-month service fee amount (the service fee for the last month of the service period stipulated in this agreement), RMB 9000.00. This performance bond is a guarantee for Party B to perform and abide by its obligations in accordance with this agreement. If Party A has not received the full performance bond on the expiration of the above period, Party A shall automatically terminate Party B on the day following the expiration of the above period unless Party A agrees to extend the payment of the performance bond. Use any other arrangement for the area. (2) Upon expiration of the service period, if Party B has paid all the service fees and other payables (if any) within the service period and has not violated any of the terms of this agreement, Party B will hand over the site to Party A and Party B will complete the registration address and change to Procedures for other addresses (If Party B uses the site address in the first paragraph of Article 1 of this Agreement as the registered address of the company), Party A will return the performance bond to Party B without interest. Party B shall, within fifteen (15) days after meeting the foregoing conditions, contact Party A for the return of the performance bond. Before the return of the performance bond, Party B shall return the original performance bond receipt to Party A or Party B shall issue a receipt for the performance bond. And stamp the unit financial chapter. The performance bond shall be refunded to Party B without interest by bank transfer or a check. (3) If Party B has violated the acts stipulated in this agreement, Party A has the right not to refund the performance bond.
Article 4 Performance Bond 4.1 To ensure that Party B pays the rent within the time limit and in the manner stipulated in this Contract, Party B shall pay 10% of the annual rent payable to Party A in a lump sum along with the first rent, i.e., RMB [13,200] as a performance bond. 4.2 Use and refund of performance bond 4.2.1 The performance bond is not rent or other fees paid by Party B in advance, and payment of performance bond does not mean that Party B can pay rent in arrears and use it to cover rent, liquidated damages or other fees. 4.2.2 If Party B’s breach of this Contract causes Party A to terminate this Contract accordingly, or Party B unilaterally terminates the Contract, Party A has the right to confiscate the performance bond. The forfeiture of the performance bond shall not affect Party B’s liability for restoration, payment of liquidated damages, payment of compensation or other defaults. 4.2.3 In case Party B breaches any provision hereof, Party A has the right to use the performance bond to offset the direct and indirect losses caused by Party B’s breach of the Contract, and if the performance bond is not enough to compensate for Party A’s losses, Party B shall still make up for the actual losses. 4.2.4 Upon expiration of this Contract, if Party B fully performs its obligations under this Contract and upon expiration of this Contract, Party A shall return the performance bond to Party B without interest within 10 days after Party B returns the Leased Property to Party A. In the event that Party B still has charges outstanding to Party A in accordance with this Contract, Party A shall have the right to deduct the relevant charges from the performance bond and return the remaining amount to Party B.
In case Party B defaults on any payment to Party A such as rent, energy fee, and performance bond, it shall pay liquidated damages of 1‰ of the default fee to Party A per day from the payable date to the actual payment date. Once Party A fails to pay in full for more than 30 days after being urged by Party A, Party A shall be entitled to terminate this Contract and confiscate the performance bond.
6.2 Where Party B refuses to sign the Property Handover List and the Facilities and Equipment Handover List for no reason, Party A shall have the right to terminate the Contract immediately and confiscate Party B’s performance bond.
7.3 If Party B subleases or lends the Leased Property, or changes the purpose of the Leased Property or Party B’s business scope without authorization, Party A shall have the right to immediately terminate the Contract and confiscate the entire performance bond.
11.4 If this Contract is terminated due to Party A’s breach, Party A shall refund the remaining part of the performance bond paid by Party B (without interest) after deducting the rent, energy fees and other expenses payable by Party B. In addition to the above fees, Party A is not required to provide Party B with any other form of indemnity or compensation.
4. Performance bond (1) Party B shall pay the first phase of the comprehensive service fee on the date of signing this Contract, and pay the performance bond of ￥8800 yuan to Party A (including the accommodation bond of 8800 yuan, the water and electricity bond of 0 yuan, the maintenance bond of 0 yuan, and the energy deposit of 0 yuan). (The specific amount is detailed in the Check-in Order, which shall be paid by Party B to Party A to ensure Party B’s performance of the obligations and responsibilities agreed in this Contract and its annexes.) The deposit shall not be used as any advance payment, but as a guarantee for Party B’s performance of this Contract. After receiving the performance bond, Party A shall provide Party B with a receipt of the same amount. (2) If Party B has paid the deposit (or earnest money) before the signing of this Contract, the deposit (or earnest money) shall be automatically converted into part of the performance bond when Party B pays the first comprehensive service fee, and the insufficient part shall be supplemented by Party B. Party B shall not use the performance bond to deduct the comprehensive service fee or any payable fee. (3) If the goods and facilities in the apartment are artificially damaged or destroyed, Party B’s personnel shall make compensation according to the original price (see Annex III for the compensation price of relevant articles), and Party A has the right to deduct the corresponding part from the performance bond and require Party B to bear additional liability for compensation. After Party A deducts Party B’s deposit, Party B shall make up the performance bond by itself within 3 days after receiving Party A’s notice of deduction, otherwise Party A shall have the right to charge liquidated damages to Party B on a daily basis according to the standard of five ten thousandths of the amount that should be made up. (4) When the term of accommodation expires or this Contract is terminated in advance, if Party B has no breach of contract or arrears of fees, Party A shall return the performance bond to Party B without interest within 30 working days after Party B returns the apartment and the deposit receipt; If Party B fails to pay off the payable expenses, liquidated damages or compensation or other breach of contract, Party A shall have the right to compensate with the performance bond, and shall have the right to recover the insufficient part from Party B.
7.Performance bond 7.1 In order to ensure the normal performance of the contract, the seller shall provide necessary safeguard measures (safeguard measures can be in the form of performance bond or performance guarantee). 7.1.1 The performance bond shall be 10% of the total contract amount, and the bid bond shall be directly converted into the performance bond. The difference can be made by wire transfer, bank acceptance draft, or bank guarantee, and must be provided before the first advance payment by the tenderer. If it is a bank guarantee, it needs to be issued by the five major state-owned commercial banks in China and large joint-stock commercial banks in China. State-owned banks include Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China, China Development Bank, Export Import Bank of China, and Agricultural Development Bank of China; national joint-stock commercial banks include China Merchants Bank, Shanghai Pudong Development Bank, CITIC Bank, China Everbright Bank, Huaxia Bank, China Minsheng Bank, Guangfa Bank, Industrial Bank, and PingAn Bank, Zhe jiang Commercial Bank, Bohai Bank). The bank guarantee template needs to be confirmed by the buyer. 7.1.2 The performance bond shall be refunded within 10 calendar days after all the subject matter has arrived at the agreed location in the contract, received preliminary acceptance, and passed the inspection.
4.5 Performance bond: Party B shall pay a one-time deposit of RMB231,296 to Party A on the date of signing this contract as the guarantee for Party B to perform its obligations and responsibilities under this agreement. Upon the expiration of this contract, after both parties have settled their claims and debts, Party A shall return the deposit without interest within 7 working days when Party B has no breach of contract.
5.2 Performance bond 5.2.1 The standard and amount of payment of the performance deposit are set out in the Annex “Basic Information Sheet of the Contract”. Party B shall pay the deposit to Party A together with the first installment of rent and property management fee; Party A shall issue a receipt for receipt for Party B upon receipt of the performance deposit. 5.2.2 In the case of a renewal contract, Party B has paid the corresponding performance deposit. If there is no change in the rent and property charges, Party B may not pay the performance deposit; if there is a change in the rent and property charges, the renewal contract will be executed as agreed. 5.2.3 The performance bond is a security deposit delivered by Party B to guarantee the performance of Party B’s obligations under this Agreement. Party A shall have the right not to apply it against the rent, property charges, liquidated damages and any other expenses (including but not limited to losses incurred by Party A or third parties as a result of Party B) owed by Party B. Party A shall have the right to choose to recover the relevant outstanding amount and liquidated damages directly from Party B. If Party A adopts to set off all or part of the performance bond against the amount owed by Party B to Party A, Party B shall make payment to Party A within 5 working days upon receipt of Party A’s notice to re-fill the original amount of the performance bond, and if the performance bond is insufficient to set off, Party A shall have the right to continue to recover the outstanding portion from Party B, or else bear the liability for default in respect of overdue fees in accordance with Clause 11.1 of this Agreement. 5.2.4 Upon expiry of the lease term or early termination of the contract, Party B shall pay all the fees payable under this contract and complete the check-out and acceptance process as agreed in this contract, and Party A shall return the performance deposit to Party B without interest within 30 days from the date Party A takes over the leased premises and accepts the premises. In case of late return, Party A shall pay to Party B a late payment of 0.1% of the total performance deposit on a daily basis.
9.1. Performance Bond. If required in a Service Addendum, Company shall deliver to Ministerio de Hacienda a performance bond in the amount specified in such Service Addendum, in the form provided by Ministerio de Hacienda, which secures the faithful performance of the Services specified in such Service Addendum (the "Performance Bond"). The Performance Bond shall contain the original notarized signature of an authorized officer of the Company and affixed thereto shall be a certified and current copy of the officer's power of attorney. The Performance Bond shall be unconditional and remain in force during the entire term of such Service Addendum and shall be null and void only if the Company promptly and faithfully performs all terms and conditions of such Service Addendum.
A Performance Bond is a type of surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. It provides a financial assurance to the project owner that the contractor will perform the work in accordance with the contract specifications. If the contractor fails to deliver the project as agreed, the bond covers the financial losses incurred by the project owner.
Performance bonds are typically used in construction projects to protect the project owner from potential financial loss due to incomplete or unsatisfactory work by the contractor. You should consider using a performance bond in situations where:
While writing a performance bond may require legal expertise, the key elements typically included are:
It’s advisable to consult a legal professional to ensure compliance with local laws and industry standards.
Performance bonds are commonly found in various types of contracts, such as:
In essence, any contract where the failure to perform could result in significant financial loss might benefit from a performance bond.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A performance bonus clause outlines the conditions under which an employee or contractor is eligible for additional compensation based on exceeding predefined performance metrics or achieving specific targets. This incentive is designed to motivate individuals to enhance productivity and align their efforts with the organization's strategic objectives.
A performance guarantee is a contractual clause that ensures one party fulfills their obligations as specified, often by providing financial assurance or a form of security. It serves to protect the other party against losses or damages if the obligations are not met satisfactorily.
A performance warranty clause is a contractual provision where the seller or service provider guarantees that their goods, services, or work will meet specified performance standards or criteria. If these standards are not met, the clause typically outlines the remedies or corrective actions that the buyer can pursue.
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