Document background
Contract Performance Guarantees are essential risk management tools in U.S. commercial transactions, particularly in high-value or complex contracts. They provide security to the beneficiary that contractual obligations will be met, either through performance by the principal or compensation by the guarantor. These guarantees are particularly common in construction, manufacturing, and government contracts, where project completion and compliance with specifications are crucial. The document typically includes detailed terms about the scope of guarantee, claiming procedures, and duration, and must comply with both federal and state-specific requirements.
