This tender bond (or bid bond) is for use where a Procuring entity is obtaining tenders for a contract and requires a bond as security against the risk of the successful bidder failing to enter into the contract. It gives the beneficiary the right to call the bond on demand within a specified period and for a maximum specified amount.

This is a down payment given to the principal by the obligee to ensure that he will perform his obligation as mentioned in the contract. An advance payment bond guarantees the obligee to complete his contract as per the agreement covering loss only when the principal cannot be able to refund the amount given by the obligee.

A performance bond is a surety bond issued by an insurance company or a bank to guarantee the satisfactory completion of a project by a principal. If the principal fails to perform according to the specifications laid out by the contract (most often due to the bankruptcy of the principal) the client (obligee) is guaranteed compensation for any monetary loss up to the amount of the performance bond.

This is a legal authorisation that allows a person to take employment in instances where a person is permitted to work in a country where one does not hold citizenship.

The first surety should be the firm employing such a person and the second surety is the Ins Co. It is the responsibility of the first surety to write to immigration when such persons leave the organization for the bond to be canceled. It is renewable in Kenya every two years.

This is a guarantee from a surety to the Government that the Principal will faithfully abide by all laws and regulations governing the payment of Customs revenue together with the proper carrying on of business in dutiable articles. There are two classes of Bonds namely;

a. Particular bonds – These are executed to cover one specific transaction.

b. General Bonds – These are executed to cover several transactions over an unspecified period.

The validity of Customs Bonds

Customs bonds do not expire. They are valid from the time of proper execution up to the time of bond discharge by the parties to the bond. Read Section 108 of the EAC Customs mgt Act and 109 on bond enforcement.