Do You Really Understand Surety Bonds Concept?

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A surety bond is a contract between three different parties. These include; the Obligee (who is the recipient of the obligation or promises entailed in the contract), the Principal (who is responsible for meeting the promises to the Obligee), and the Surety (whose main purpose is to provide a guarantee to the Obligee that the Principal would be able to meet the terms and conditions stipulated in the contract).

The primary purpose of a surety bond is to ensure that the obligations, or promises, stipulated in the contract are met by the principal. In the event, that the principal is unable to meet these obligations, the surety steps in order to make sure that the obligations stipulated are met.

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