• A bid guarantee is a legal agreement that guarantees that contractors will fulfill their stated obligations for the project.
  • This form of guarantee provides both financial and legal protection for the project owner.
  • Tender bonds are usually submitted with the project contract.
  • Bonds are secured by specialized surety companies that guarantee that payments will be made if the contractor fails to fulfill its part of the deal.
  • The other major types of construction bonds are performance and payment bonds.