Meaning of “bid bond” in the English Dictionary

business-english dictionary

"bid bond" in Business English

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bid bondnoun [ C ]

uk us

an amount of money that a company that makes the lowest bid to do a particular piece of work promises to pay if it then does not do the work:

The purpose of the bid bond is to prevent frivolous bidders.
A bid bond is often in the form of a financial guarantee from a bank or insurance company.

(Definition of “bid bond” from the Cambridge Business English Dictionary © Cambridge University Press)