Bid bond

Definition of Bid bond

: a surety bond often required of contractors bidding on construction work to ensure that the successful bidder will accept the job and will also provide a performance bond

In the United States, according to 15 USCS § 694a (1), [Title 15. Commerce and Trade; Chapter 14B. Small Business Investment Program; Surety Bond Guarantees] the term bid bond means “a bond conditioned upon the bidder on a contract entering into the contract, if he receives the award thereof, and furnishing the prescribed payment bond and performance bond.”

See Also

Accrual Bond
Additional Bond Test
Adjustment Bond
American Municipal Bond Assurance Corporation
Ancillary Bond
Appeal Bond
Arbitrage Bond
Assumed Bond
Attachment Bond
Average Bond
Bid Guarantee
Bid Price
Bid Price of a Leverage Contract
Bid Sample

What does Bid Bond mean in American Law?

The definition of Bid Bond in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

A bond from a surety often required of participants in competitive biddings to indemnify the other party against loss should the winning bidder attempt to withdraw his bid or refuse to enter into the contract awarded him. Sometimes persons letting contracts through competitive bidding insist that bidders deposit cash or other “bid security” (not necessarily a bond) which will be forfeited upon the successful bidder”s default.