What is a performance guarantee?
Performance guarantee is a guarantee provided to ensure the smooth performance of the contract. Article 46 of the Bidding Law stipulates: "If the bidding documents require the winning bidder to submit a performance bond, the winning bidder shall provide it." In the construction project bidding, the way of performance guarantee can be to submit a certain amount of performance bond; Credit guarantee (guarantee) of a third party can also be provided. Generally, a bank or guarantee company issues a performance guarantee to the tenderer.
What are the main ways of performance guarantee?
1, mortgage. Mortgage means that the debtor or the third party does not transfer the possession of the collateral and takes the collateral as the guarantee of the creditor's rights.
2. Take an oath. Pledge refers to the debtor or a third party handing over his movable property to the creditor, or handing over his property right to the creditor, and taking the movable property or property right as the guarantee of the creditor's right.
3. lien. Lien means that in the custody contract, transportation contract and processing contract, the creditor occupies the debtor's movable property according to the contract, and the debtor fails to perform the debt within the time limit stipulated in the contract, and the creditor has the right to lien the property in accordance with the provisions of the security law, with priority paid for the discount of the property or the price of auction or sale of the property.
What's the difference between a performance bond and a performance guarantee?
1 has different meanings.
Performance bond: refers to the performance bond commitment made by bank financial institutions to the project owner at the request of labor service providers and contractors.
Performance bond: refers to the performance bond in the form of performance guarantee, performance bank guarantee and performance guarantee, which can be used to confirm checks, bank drafts or cash checks to prevent the contractor from violating the contract provisions during the execution of the contract and not causing economic losses to the employer.
2. The issuing unit is different.
Performance bond: issued by the bank.
Performance guarantee: generally issued by the guarantee company.
3. The amount of protection is different.
Performance bond: the guarantee amount is 10% of the contract price.
Performance guarantee: the guarantee amount is about 30% of the contract price.
By reading the article, I believe that everyone has a certain understanding of the specific amount and related knowledge of the performance guarantee, which is more convenient for everyone to work better.
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