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.”
Additional Bond Test
American Municipal Bond Assurance Corporation
Bid Price of a Leverage Contract
What does Bid Bond mean in American Law?
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.