Performance Guaranty
Assurance that a party will fulfill contractual obligations.
Detailed Explanation
A Performance Guaranty is a contract where a third party (often a parent company or bank) guarantees the actual performance of a contractor's or supplier's obligations, rather than just payment. If the primary party fails to deliver the goods or complete the project, the guarantor must either step in to finish the work or pay for the cost of completion. This is common in construction and large-scale supply contracts.