surety
Sign in to saveAlso known as surety bond, guaranty, guarantee, suretyship
In finance, a surety , surety bond, or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a person or company (a surety or guarantor) to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation.
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Article
20 sectionsContents
- Overview
- History
- Reason for having a guarantor
- United States industry
- Miller Act
- Right of subrogation
- Distinction between a suretyship arrangement and a guaranty
- Contract surety bonds
- Commercial surety bonds
- License and permit bonds
- Court bonds
- Public official bonds
- Miscellaneous bonds
- Business service bonds
- Penal bonds
- Electronic surety bonds
- Timeline
- See also
- References
- External links
In finance, a surety , surety bond, or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a person or company (a surety or guarantor) to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation.
== Overview == A surety bond is defined as a contract among at least three parties: the obligee: the party who is the recipient of an obligation the principal: the primary party who will perform the contractual obligation the surety: who assures the obligee that the principal can perform the task