Surety bond
A surety bond is a contract among at least three parties: Through this agreement, the surety agrees to uphold—for the benefit of the obligee—the contractual promises (obligations) made by the principal if the principal fails to uphold its promises to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal and guarantee performance and completion per the terms of the agreement. Contract bonds guarantee a specific contract. Examples include performance, bid, supply, maintenance and subdivision bonds. Commercial bonds guarantee per the terms of the bond form. Examples include license & permit, union bonds, etc. Individual Surety Bonds are the original form of suretyship. The earliest known record of a contract of suretyship is a Mesopotamian tablet written around 2,750 BC.
Related Questions
- Who is the owner, construction lender, or payment bond surety for purposes of serving, recording and pursuing preliminary notices, mechanics liens, and payment bond claims in California law?
- How do I obtain a surety or fidelity bond (notary bond, construction bond, performance bond, etc.) for the type of work I want to perform?
- Surety bond
