Surety Bond Benefits

Bonds play a major role in todays market. Bonds become more essential in construction industry for completion of their construction projects. Underwriting bonds involve great risk. But the surety company will write these bonds for the benefit of their customers. If bonds have been underwritten, it has following benefits.

• The oblige gets a guaranteed performance of the contract from the principal and the surety.

• These bonds enforce the contractor to complete the contract with in the stipulated time and contract money.

• This bond guarantees the payment from the oblige to the contractor and from the principal to the subcontractor.

• This bond ensures that the supplier will furnish the material and labor to the principal as signed in the contract.

• In default of the contract, the oblige can sue the principal i.e. the obligator and the also the surety.

• The oblige can enforce the surety to complete the contract with in the stipu lated time and contract money in failure of the principal for completion.

• The underwriter of the surety company can provide financial, technical assistance to the contractor.

Contractor A contractor is a person who undertakes the risk of completion of contract with in stipulated time and contract price. The contractor performs a contract for a price consideration. The contractor guarantees the owner that he will finish the contract with in stipulated time and contract value, through issuance of the bond. In default of the contractor, the oblige will sue him against the court of law. This bond ensures the contractor has guaranteed performance of the contract.