A surety bond provides assurance that the party to a contract will perform his or her part of the contract.

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A surety bond is a type of contract guarantee in which a third party agrees to be responsible for the performance of another party's obligations. If the first party fails to perform the terms of the contract, the surety bond provides assurance that the second party will be compensated for any resulting losses or damages.

A Surety Bond Provides Assurance That the Party to a Contract