Bid Bond or Tender Bond
A bid bond is a form of bond which may be required
in order for a contractor to submit a bid under a public tender. In some cases a formal
bond is to be issued by a surety company, typically in an amount of 5% or 10% of the
expected contract amount. In some other cases there may be the option of a surety company
issued bid bond or a cash bond. In a few cases, only a cash bond may be acceptable.
In addition to a bid bond and/or as a substitute for a bid bond, some tenders may
require a letter from the surety company consenting to provide performance bonding
should the tenderer be successful in its bid.
Performance Bond or Final Bond
A performance bond is a form of contract
surety bond which may be required in support of any type of contract. The majority of
performance bonds are issued on behalf of construction industry contractors in support
of contracts they wish to enter into with various government related or institutional
organizations. Various large commercial concerns and financial institutions may also
require performance bonds.
While contracts requiring bonding are most commonly related to construction projects,
performance bonds are frequently required in support of contracts for the supply of
materials, services, labour and products of many kinds.
Labour and Material Payment Bond
A Labour and Material Payment Bond is
a form of contract surety bond frequently required along with a performance bond.
This bond will be underwritten as part of the performance bond submission and
guarantees that all your subcontractors and material suppliers will be paid as required
under your contract. Please note that the labour and material payment bond is for the
protection of your customer and your sub-contractors and suppliers and does not
discharge your company from its legal obligations under the contract.
The term payment bond is sometimes also used to refer to a financial guarantee
bond which you may be asked to furnish to a supplier from whom you are purchasing
goods and with whom you do not have a credit relationship which is adequate to cover
the transaction.
Consent of Surety or Agreement to Bond:
A Consent of Surety or Agreement to Bond, is often required at the tendering stage of a contract in conjunction
with or as a substitute for a bid bond. This form of document will specify, under seal,
that a surety company has obligated itself to issue performance bonds and other forms
of security (eg. labour and material payment bonds, maintenance bonds) in support of a
contractor should it be successful in its bid and called upon to enter into a formal
contract. It should be noted that the requirement for a consent of surety/agreement to
bond may sometimes appear as a "letter from the surety company" or similar in tender
documents. At other times the requirement may be simply for a prequalification letter
from the surety company which is a much less formal matter.
A consent of surety/agreement to bond is a bond and as such places a legal obligation
on both the surety company and the company submitting the tender bid.
Customs and excise bonds are for the benefit of federal and provincial governments and guarantee that either duties or taxes will be paid by the principal to the government. These bonds ensure that companies comply with all legal and tax requirements related to their business. Operations involved in import, export, sales or distribution of goods in Canada may require a customs and excise bonds. We offer the following customs & excise bonds in Canada.
- Bonded Freight Forwarder
- Excise Bond
- Excise Bond (Spirits License)
- Non-Resident GST bond
- Release of Goods Prior to Payment of Duties (Customs Brokers)
- Release of Goods Prior to Payment of Duties (Importer Direct)
- Bonded Highway Carrier
- Customs Bonded Warehouse
- Customer Broker License
- Customs Sufferance Warehouse
- Temporary Importation of Goods (Customs Brokers)
- Temporary Importation of Goods (Importer Direct)
License and permit bonds are required by federal, provincial and municipal governments to guarantee compliance with bylaws and regulations relating to a specific license or permit. Essentially, these bonds ensure that a business or individual meets all government rules and regulations.
Governments regulate these types of businesses and operations to protect the public against incompetence, physical damage, bodily harm, fraud, or misrepresentation. We offer the following license & permit bonds in Canada.
- Electrical Bond, British Columbia
- Home Inspectors Bond, Alberta
- Mechanical Permits Bond, Alberta