TL;DR
A performance bond is a surety guarantee that a construction contract will be completed according to its terms: if the contractor defaults, the surety must finance completion, hire a replacement, or pay the owner up to the bond amount. Standard on public projects and large private work at about 1 to 3 percent of contract value, it is underwritten against the contractor's finances and track record — so the ability to obtain one is itself a vetting signal.
What it means
A performance bond is a surety guarantee that a construction contract will be completed according to its terms: if the contractor defaults, the surety must finance completion, hire a replacement, or pay the owner up to the bond amount. Standard on public projects and large private work at about 1 to 3 percent of contract value, it is underwritten against the contractor's finances and track record — so the ability to obtain one is itself a vetting signal. It protects the owner, unlike license bonds that mainly protect the public.
Where it sits in the glossary
Performance bond is part of the Legal group inside the ProFix Directory glossary. Browse every term in this category from the glossary index.
Why Ohio homeowners should know it
This is a term Ohio homeowners encounter when reading contractor quotes, hiring paperwork, or inspection reports. Understanding it well enough to ask one good follow-up question is usually all the protection a homeowner needs.
ProFix Directory keeps definitions short on the index page and saves the longer context — Ohio-specific rules, where the term comes from, and which ProFix tools touch it — for these per-term pages so the term is easy to cite and easy to share.
ProFix tools that touch this term
See also
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