What is the third party to whom the surety is answerable called?

The third party to whom the surety is answerable is referred to as the obligee. In a surety bond arrangement, the obligee is the party that requires the bond, ensuring that the principal (the party that needs the bond) will fulfill their obligation. If the principal fails to meet these obligations, the surety (the party providing the bond) is responsible for compensating the obligee up to the bond amount.

This framework is critical in ensuring that projects are completed or obligations are met, providing a safety net for the obligee. The role of the obligee is central to understanding surety bonds, as they define who has the protection provided by the surety and what is at stake if the principal defaults.