A bid bond, which is typically for 2-5% of the contract amount, ensures that the importer will receive compensation if the exporter defaults on his obligations as tenderer under an invitation to tender.

A bid bond is often a condition for the consideration of a bid.

Performance bond
A performance bond, which is typically for 10-20% of the contract's value, ensures the importer compensation if the exporter does not fulfil his obligations. It could be a question of supply obligations or obligations concerning function and quality during the agreed period of the guarantee.

Advance payment bond
An advance payment bond, which is typically for 10-30% of the contract amount, ensures repayment to the importer of an agreed and paid deposit if the exporter does not fulfil his contractual obligations.

Retention bond
With the supply of factory plant, machines and other capital goods, it is often agreed that the buyer may withhold 5-10% of the contract amount for a guarantee period of, say, 12 months after the plant or machines are up and running.

It is possible for the exporter to get the full contract amount paid out before the end of the guarantee period by issuing a retention bond that covers the amount that would otherwise have been withheld.

Payment guarantee
A payment guarantee ensures payment to the exporter if the importer does not fulfil his payment obligations.

A payment guarantee can be issued in the form of an endorsement on a draft, a so-called avalising. In such cases Danske Bank guarantees the payment of the draft.