business law

Surety bond

Sometimes, when a party owes others legal duties, the party posts a surety bond to guarantee their performance. The surety bond is like a security deposit, with the party promising to do something as the renter and person they owe obligations to, or obligee, is like the landlord. Thus, if the party that made the promise fails to perform their duty, the obligee is compensated out of the bond. 

 

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