Contracts & ExecutionQuestion 208 of 1632
A contractor's bid bond on a public project primarily guarantees that:
a.The finished work will stay free of defects for ten years
b.Every subcontractor and supplier on the job will be paid
c.The contractor will complete the work for the contract price
d.The winning bidder will sign and post the required bonds
Explanation
A bid bond guarantees only that a bidder who is awarded the contract will enter into that contract and furnish the required performance and payment bonds; if the bidder walks away, the bond answers for the cost of reletting the work. Completing the work for the contract price is what a performance bond guarantees. Paying subcontractors and suppliers is the payment bond. And a ten-year defect guarantee is a warranty or maintenance bond.
Law Reference: Bid bond vs performance/payment bond (public contracting practice); Public Contract Code §20103.5This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)