Performance Bond

A bond issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract.

Investopedia Commentary

For example, a contractor may issue a bond to a client for whom a building is being constructed. If the contractor fails to construct the building according to the specifications
laid out by the contract, the client is guaranteed compensation for any monetary loss.

Related Links

Bond Basics Tutorial
How Does Your Margin Grow?

See also: Bank Guarantee, Bankers' Acceptance, Bond, GIC