User:Jcanaan/Surety

In finance, a surety /ˈʃʊərɪtiː/, surety bond, suretyship or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation. The person or company providing the promise is also known as a "surety" or as a "guarantor". The suretyship creates a legal responsibility to guarantee the terms agreed upon, will be fulfilled.