The word Surety is a noun pronounced sur e ty, the definition of the word Surety is: a guarantor, which will assume responsibility of another person (principal) obligations if the principal cannot, or does not meet them. The term Surety has existed for thousands of years.
Example of Surety
Have you ever heard the saying “don’t ever be anyone’s Surety”, what exactly does it mean? You would guarantee that the obligations of the person you where acting as Surety for. If you were acting as a Surety for a particular obligation of another (Principal) if the obligations where not met you would have to meet those obligations on the principals behave. Surety has been around for thousands of years ago when someone would vouch for another for whatever circumstance.
How a Surety brings peace of mind
Let us suppose for a moment that you where an owner of a large piece of land and you wanted to develop it. After years of research money and time, you decided you wanted to build a commercial building on that land you hire a contractor to complete the project. At first, your contract is doing a great job and everything seems to be going smoothly. After six months of construction, the project starts running behind schedule and you have failed inspection. The inspector tells you that the foundation is not up to code and it needs to be completely redone on top of that, the contractor walks form the job because the project has become unprofitable. That is where a Surety would come in if you made that one of your requirements for the contractor to obtain. The Surety would do one of the following things they would hire a new contractor, reimburse you monetarily, or finish the project. See the Surety would take up the obligations that the principal in this case contractor’s obligations. After the Surety has settled the claim the Surety would than go after the principal for the loss to the Surety.
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