Which of the following statements about surety bonds is (are)true?
I.The surety has a legal right to recover a loss payment it made on behalf of a defaulting principal.
II.The obligee is the party who benefits from the bond if the principal fails to perform.

Question

Quizplus · Accepted Answer

I. The first statement is true. A surety has the right to recover a loss payment made on behalf of a defaulting principal from the principal. This is because the principal is responsible for reimbursing the surety for any losses incurred.

II. The second statement is also true. The obligee is the party who benefits from the bond if the principal fails to perform. This is because the obligee is the one who is protected by the bond, and is entitled to payment if the principal defaults.

Which of the Following Statements About Surety Bonds Is (Are)true