What is a performance bond?

A performance bond is a type of surety bond used in contract law in Nebraska. It is an agreement between three parties: the principal or contractor, the obligee, and the surety. The contractor is the one who will be performing the work, the obligee is the person who is requesting the work, and the surety is the party that will guarantee the performance of the contractor. The surety will issue a performance bond that guarantees the performance and completion of the project as per contract. If the contractor does not complete the project in the timeframe and manner specified, the surety is then liable for any damages resulting from the breach of contract. The purpose of a performance bond is to protect the obligee from losses due to a contractor’s failure to complete the project. The bond helps ensure that the project is finished according to the terms of the contract. In Nebraska, a performance bond must be in place before a contractor can begin work on any public projects. In summary, a performance bond is an agreement between three parties—the contractor, the obligee, and the surety—that guarantees the performance of the contractor’s work. It provides protection to the obligee in case of a breach of contract by the contractor. In Nebraska, a performance bond is required for public projects.

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