Page 218 - BASIC GUIDELINE FOR QS

Quantity Surveying: Guideline for Quantity Surveyor Chapter 6

6.16 Performance Bond
An execution bond is a written agreement in which a person binds himself to another
person to do something.

6.16.1 Guarantee Needs
Make a bond gave the assurance performance as something contract. When failed

contractor carrying out work, employer (client) entitled to demand the bond paid to those
it to the maximum level.

6.16.2 Types Of Tender Guarantee
By the provisions Seksyen 79, Contract Act 1950, a guarantee may be granted either

verbally or written one. Guarantee tender may be divided into :
 Cash

 Deposit treasury or draft bank
 Bond issued by the party insurance bank or company

6.16.3 Bond Features
 Written

 Sealed

 Is issued by insurance company & bank for proof, financial management &
records.
 The seal shall include the signature of the officers or officers authorized to

sign the bond on behalf of the insurance company or bank.
 Stamped

6.16.4 Commencement of Existence and Validity Period

 Performance bond must prepared by early contract, that is before contract

start or before contractor entitled to be paid.
 Protection period must be beginning from the date the contract started to 6

months after defect liability period (depend on conditions of contract),
sometimes extend during 12 months.
 If the contract is canceled then the bond is valid until one (1) year after the

date of cancellation

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