Should the performance bond be paid before or after the contract is signed?

Laws and Regulations

There is no clear rule on to whom the performance bond is delivered. Usually within 5 days after receiving the notice of winning the bid, the tenderer shall pay the performance bond in time to avoid the loss caused by missing the time. The performance bond may be a performance bond, a certified check, a bank draft or a cash check, and the performance bond generally does not exceed 10% of the contract**.

Legal analysis

The provision of the performance bond can protect the rights and interests of both parties from loss, according to the law, the tenderer charges a certain performance bond according to the value of the project. Generally speaking, the time for the payment of the performance bond will generally be reflected in the project bidding documents, and the bidding and recognition of the winning bid will be carried out in accordance with the provisions of the bidding documents, and the specific contract signed in the later stage can also clearly agree on the time of payment. Generally, the performance bond will be paid within 30 days after the notice of winning the bid.

At the same time, the characteristics of the performance guarantee economy.

1. The tenderer must clearly stipulate in the bidding documents that when the winning bidder submits the performance bond, this clause is valid, and if it is not clearly stipulated in the bidding document, it shall not be added after winning the bid. This maintains the authenticity of the offer in the bidding and the rights and interests of the bidder, and the project tenderer can choose whether to bid for the project according to its own conditions. Therefore, the performance bond is optional.

The tenderer must clearly stipulate in the bidding documents that when the winning bidder submits the performance bond, this clause is valid, and if it is not clearly stipulated in the bidding document, it shall not be added after winning the bid. This maintains the authenticity of the offer in the bidding and the rights and interests of the bidder, and the project tenderer can choose whether to bid for the project according to its own conditions. Therefore, the performance bond is optional.

Legal basis

Article 37 of the measures for bidding and bidding for the construction of engineering construction projects The tenderer may require the bidder to submit a bid bond in the bidding documents. In addition to cash, the bid bond can be a bank guarantee, a certified check, a bank draft or a cash check issued by the bank. The bid deposit shall not exceed 2% of the estimated price of the project, but the maximum shall not exceed RMB 800,000.

The validity period of the bid bond shall be consistent with the validity period of the bid. The bidder shall, in accordance with the manner and amount required by the bidding documents, submit the bid bond with the bidding documents to the tenderer or its entrusted bidding agency. For domestic bidders of projects that must be tendered for construction in accordance with the law, the bid bond submitted in the form of cash or cheque shall be transferred from its basic account.

Generally, it is paid after the contract is signed and takes effect. Of course, there are cases where the order of payment is reversed first, and the order is reversed. However, it is recommended to conclude the contract first and pay the performance bond after the contract comes into effect.

The security deposit can be paid before it is signed, but there must be relevant documents. You can pay after signing.

Legal analysis: According to the provisions of Article 46 of the Bidding Law of the People's Republic of China, a written contract shall be concluded within 30 days from the date of issuance of the notice of winning the bid, and the performance bond shall be submitted after winning the bid and before signing the contract, so the performance bond shall be paid before signing the contract.

Legal basis: Article 46 of the Tendering and Bidding Law of the People's Republic of China Article 46 The tenderer and the winning bidder shall, within 30 days from the date of issuance of the notice of winning the bid, enter into a written contract in accordance with the bidding documents and the bidding documents of the winning bidder. The tenderer and the winning bidder shall not enter into other agreements that deviate from the substantive content of the contract.

If the bidding documents require the winning bidder to submit a performance bond, the winning bidder shall submit it.

Generally, it is paid after the contract is signed and takes effect. Of course, there are cases where the order of payment is reversed first, and the order is reversed. However, it is recommended that Donghu enter into a contract first and pay a performance bond after the contract takes effect.

The signing must be accompanied by relevant documents. Contracts established in accordance with the law are protected by law. A lawfully established contract is only legally binding on the parties.

The performance guarantee is used by the project employer to prevent the contractor from violating the contract provisions or breach of contract during the execution of the contract, and to make up for the economic losses caused to the employer. This is in the form of a performance bond.