Surety

A surety, surety bond or guaranty, in finance, is a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company providing this promise is also known as a "surety" or as a "guarantor".A surety most typically requires a guarantor when the ability of the primary obligor or principal to perform its obligations to the obligee (counterparty) under a contract is in question, or when there is some public or private interest which requires protection from the consequences of the principal's default or delinquency.
Posts about Surety
  • DRAFTING THE BOND FORM, PARTICULARLY THE PERFORMANCE BOND FORM

    … Oftentimes, when it comes to payment and performance bonds (in particular) the bond forms are drafted by the obligee. For example, an owner (as the obligee) may draft the bond forms that it wants its general contractor’s surety to execute. And, a general contractor (as the obligee) may draft the bond form that it wants its subcontractors…

    Florida Construction Legal Updates- 11 readers -
  • ATTORNEY’S FEES AGAINST COMMON LAW PAYMENT BONDS

    …. 627.756 provides: (1) Section 627.428 (entitlement to attorney’s fees) applies to suits brought by owners, subcontractors, laborers, and materialmen against a surety insurer under payment or performance bonds written by the insurer under the laws of this state to indemnify against pecuniary loss by breach of a building or construction contract…

    Florida Construction Legal Updates- 12 readers -
  • STAYING MILLER ACT PAYMENT BOND LAWSUIT PENDING ARBITRATION

    … In a prior posting, I discussed how federal courts have discretion to stay a subcontractor’s lawsuit against a payment bond surety pending an arbitration between the subcontractor and general contractor. This posting did not pertain to a Miller Act payment bond. However, low and behold, this same rationale would apply to a subcontractor’s…

    Florida Construction Legal Updates- 15 readers -
  • Mechanics’ Liens: Part 4. Enforcing a Lien

    … a bond to serve as substitute collateral and ask the court to order that the lien be released. That removes the owner from the middle of your dispute with the GC. If you sue the GC for breach of contract and win, and if the GC does not pay you the amount of the judgment, you can collect from the surety who underwrote the bond. (In essence, the GC’s…

    Michael Smith/ Indiana Business Law Blog- 40 readers -