Advance Payment Guarantee/Bond
An Advance Payment Guarantee (APG) or Bond is a contract where a third party agrees to ensure one party meets its obligations—typically payment—to another. It can be primary, acting as indemnity to cover full payment if the obligated party defaults, or secondary, serving as a guarantee to assure the agreed outcome is achieved. Used in transactions like construction or trade, it protects the recipient by securing advance payments, reducing financial risk if the payer fails to deliver as promised.
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