The exam asks you to sort bonds into three groups: contract bonds, financial guarantees and faithful performance bonds. The fastest test is to ask what is being guaranteed: a contract, a payment of money, or the way a person carries out a job.

Contract bonds guarantee obligations that come from a contract: - Bid bond: backs a bidder's promise to sign the contract if it wins the job. - Performance bond: backs completion of the work under the contract. - Payment bond: backs payment of the people who supply labor and materials to the job. A public official bond is not a contract bond: it is tied to an officer's duties, so it is a faithful performance bond.

California example: under Civil Code §9550, a direct contractor awarded a public works contract involving an expenditure over $25,000 must give a payment bond before work begins. The bond goes to, and must be approved by, the awarding officer or public entity, and the public entity must state the requirement in its call for bids. Contracts with state entities follow Public Contract Code §7103 instead.