surety bond
A surety bond is a contract under which one party (the surety) guarantees the performance of certain obligations of a second party (the principal) to a third party (the obligee).
Additional Information
For example, construction contractors are often asked to provide a variety of surety bonds guaranteeing their promise to enter into a contract at the bid price (bid bond), their completion of the contract (performance bond), or the delivery of a project free of liens (payment bond).
