In terms of surety bonds, who is responsible for ensuring obligations are fulfilled?

In the context of surety bonds, the surety serves as the party responsible for ensuring that the obligations of the principal—typically someone who is undertaking a specific obligation, such as completing a contract—are fulfilled. A surety bond is a contract among three parties: the principal, the obligee, and the surety.

When the principal fails to meet their obligations as specified in the bond, the surety must step in and fulfill those obligations, either by completing the work necessary or by compensating the obligee, who is the party to whom the obligation is owed. This framework establishes the surety's role as the guarantor, providing security for the obligee that the obligations will be satisfactorily completed, thereby protecting against potential losses.

The other parties involved have distinct roles: the principal is responsible for the performance of the obligation, while the obligee is the recipient of the benefit of the bond requiring the guarantee from the surety. The surety's primary function is to back the principal’s commitments, ensuring that, should the principal default, the surety will cover the losses to the obligee.