On Demand Bonds
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Bonds can be 'on demand' or 'conditional', with conditional bonds requiring that the client provides evidence that the contractor has not performed their obligations under the contract and that they have suffered a loss as a consequence.
With on-demand bonds, the bondsman pays an amount of money set out in the bond immediately on demand in writing without needing to satisfy any preconditions whatsoever (including establishing the contractor’s liability) unless the demand is fraudulent. On-demand bonds tend to be common in international projects but are less normal in the UK were they are generally resisted because of their draconian nature.