A non-legal term generally referring to a type of on-demand bond (sometimes also confusingly referred to as a performance guarantee, although it is not a guarantee in the legal sense) under which the issuer undertakes to pay a buyer of goods, or someone who has contracted to be provided with services, a sum of money if the seller or services-provider fails to deliver the goods or perform the services in accordance with the terms of a contract.

On-demand performance bonds are common on international construction projects. Under such bonds the issuer undertakes to pay the employer on demand for loss suffered or incurred from the contractor's failure to carry out the works in accordance with the construction contract.

In relation to performance security that is in fact a guarantee, and which therefore imposes a secondary liability, see guarantee.