Surety Bond (Noun)
Meaning
A bond given to protect the recipient against loss in case the terms of a contract are not filled; a surety company assumes liability for nonperformance.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The contractor had to purchase a surety bond before being awarded the government construction project.
- A surety bond was required by the client to guarantee that the supplier would meet the terms of the delivery contract.
- The small business owner obtained a surety bond to cover the financial risks of her company's obligations.
- As part of the construction contract, the developer had to secure a surety bond to ensure timely completion.
- Before the lender approved the loan, the borrower had to purchase a surety bond to mitigate potential losses.