Completion, Performance

Po'boy, hoagie, grinder, heroe, sub: You get the idea. Different names for the same thing. So what about these surety bond names? Over the years I've heard them all used for the same transaction. But are they really the same? No, No, No, Nooooooooo! "Who's" on first: (brief definitions) Principal - is the construction company whose actions are the subject of the bond Obligee - is the party protected by the bond Surety - is the bonding company providing the guarantee Performance Bond: Issued in connection with a contract that is referenced in the bond. Guarantees that the principal will complete the project on time and in compliance with all written conditions. The obligee is the beneficiary of the bond and is the "project owner" of the contract (they are hiring the contractor and paying for the work). The obligee could be a public or private entity. A Dual Obligee Rider could add parties with a financial interest - such as the construction lender. They would share in the bond amount in the event of a claim. rg9EjESs
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