A bid bond is a surety bond that guarantees to a project owner that a contractor, if awarded a contract, will enter into the contract and provide any required performance and payment bonds, protecting the owner from financial loss if the contractor fails to do so.  

 A performance bond, also known as a contract bond, is a surety bond that guarantees a contractor will complete a project according to the terms of the contract, protecting the project owner (obligee) if the contractor defaults.  

 A payment bond is a type of surety bond that guarantees subcontractors, laborers, and material suppliers will be paid according to the terms of a contract, even if the contractor defaults on their obligations.