.png)
Surety is a guarantee provided by one party (the Surety) to a second party (the Obligee) that a third party (the Principal) will fulfill a specific contractual or legal obligation.
In finance and insurance, a surety bond is the formal, legally binding contract that formalizes this three-party agreement. It acts as a financial safeguard, ensuring the Obligee is compensated if the Principal fails to perform their duties or violates the terms of the bond.
The Principal (The Obligor): The party that purchases the bond and has the primary obligation to perform the contract or adhere to the regulation (e.g., a construction contractor, a licensed business).
4 Views