Commercial Property Ch. 13: Surety Bonds

Appeal Bond

A judicial bond guaranteeing that a plaintiff who appeals an adverse decision to a higher court will pay all court costs of the appeal.

License and Permit Bonds

Surety bonds that provide payment to the obligee (the state, city, or other public entity) for loss or damage resulting from violations of the duties and obligations imposed on the licensee or permit holder.

Suretyship

The obligation of one entity to answer for the debt, default, or miscarriage of performance of duties by another entity.

Surety

The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law.

Release of Attachment Bond

A bond that guarantees that the insured will pay any damages and court costs if the court should decide in the claimant's favor.

Court Bonds

A classification of surety bonds guaranteeing that a person or an organization will faithfully perform certain duties described by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court's decision.

Public Official Bond

A commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly.

Subdivision Bond

A contract bond guaranteeing a local governmental authority that a subdivision developer will complete the subdivision in accordance with approved proposals and at the developer's expense.

Bid Bond

A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted.

Performance Bond

A contract bond guaranteeing that a contractor's work will be completed according to plans and specifications.

Supply Contract Bond

A contract bond guaranteeing that a supplier will perform the designated supply contract according to specifications.

Payment Bond

A contract bond guaranteeing that the project will be free of liens.

Maintenance Bond

A contract bond guaranteeing that the work will be free from defects in materials and workmanship for a specified period after the project is completed.

Fiduciary Bond

A court bond guaranteeing that a person appointed by a court to administer the property or interests of others will faithfully perform his or her duties.

Defendant's Appeal Bond (Supersedeas Bond)

A judicial bond guaranteeing that a defendant who appeals an adverse decision to a higher court will pay the entire judgment, plus court costs and interest, should the higher court sustain the initial judgment for the plaintiff.

Attachment Bond

A judicial bond guaranteeing that, if the court decides against a plaintiff who has requested attachment of the defendant's property, the defendant will be paid any damages that result from the property attachment.

Contract Bond

A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts.

Surety Bond

A written contract that expresses one party's promise to answer for another party's failure to do something as promised.

Miscellaneous Bond

Any bond that does not fit well under the other primary categories of surety bonds formulated by the Surety and Fidelity Association of America.

Obligee

The party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised.

Principal

The party to a surety bond whose obligation or performance the surety guarantees.