A deposit, usually 20% of the actual amount, which must be given by the winning bidder, taken as a surety that he will pay all sums on time and in full that are owed by its suppliers, employees and other entities that might have worked.

More On This Topic

Link to This Definition
Did you find this definition of PAYMENT BOND helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary