A bond is defined as a contract among at least three parties:
- The obligee – the party who is the recipient of an obligation
- The principal – the primary party who will perform a contractual obligation
- The surety – who assures the obligee that the principal can perform the task
Bonding is just another form of protection. In the event that a homeowner is not satisfied with the workmanship of a licensed contractor for a home project, bonding gives homeowners the opportunity to be reimbursed or acquire necessary funds to hire another contractor to finish the job.