[View the detailed guide on a performance guarantee schedule ] - In the context of a professional services agreement, a performance guarantee can serve as a crucial safeguard to ensure the successful completion of a project. It's particularly important when the service provider is a subsidiary of a larger parent company, and there's a risk that the service provider may not be able to fulfill its obligations due to financial or operational difficulties. - A performance guarantee might be required at the start of the project, especially when the project involves a significant investment, high levels of complexity, or long completion timelines. It assures the client that if the service provider fails to deliver the deliverables as per the agreed specifications, timelines, or quality standards, the parent company will step in to ensure the completion of the project or provide financial compensation. The performance guarantee thus acts as a form of risk mitigation for the client, increasing the overall confidence in the project's successful execution.