A performance bond on a construction project primarily guarantees to the obligee that:

Explanation

A performance bond runs to the obligee — usually the owner or the public entity — and guarantees performance of the contract; if the contractor defaults, the surety may complete the work itself, tender a replacement contractor, or pay damages up to the penal sum of the bond. (a) is the payment bond's job, and the two are usually bought together: on private work Civil Code §8608 fixes who may claim on it, and on public work §9550(a) requires one on any contract over $25,000. (b) is the lender's decision, which no surety guarantees. (c) is a separate statutory duty under B&P §7125 and Labor Code §3700.