Holding more than 30 years of experience in business across a variety of industries, Gregor Gregory founded and served as president of AAUG Realty until 2009. In addition to his time working with AAUG Realty, Gregor Gregory currently serves as director of Northernlight, another company that he founded that specializes in the international construction market. Northernlight provides bond solutions to international clients as a monoline insurance company, and offers a range of products, including maintenance, bid, and performance bonds.
A performance bond can also be called a contract bond, and refers to a bond issued by one party involved in a contract to protect against the failure to meet certain obligations by the other party in the contract. In most circumstances, performance bonds are issued by a bank or other financial institution (like an insurance company) as insurance that a contractor will complete a specified construction project.
Performance bonds are quite common in the fields of real estate and construction. Developers are often required to ensure that project managers and contractors provide performance bonds, usually at the request of the owner or investor, ensuring the value of the project is not lost.
Another common use for performance bonds is in commodity contracts. In this case, the seller is asked to provide a performance bond to the buyer, ensuring some compensation to the buyer if the commodity is not actually delivered to them. In both cases, performance bonds help to protect one party from the failure of the other party to deliver on their end of the contract, offering compensation to cover any financial losses incurred.
