Contractual relationship in which one party (surety) guarantees another party (obligee) against the default or misperformance of a third party (principal). (See Fidelity Bond and Surety Bond.)
Refers to obligations to pay the debts of, or answer for, the default of another. It assumes a legal relationship based upon the contract in which one person (the surety) undertakes to answer to another (the obligee) for the debt, default, or miscarriage of a third person (the principal) resulting from the third person's failure to pay or perform as required by an underlying contract.
the function of being a surety. Suretyship embraces all forms of obligations to pay the debt or answer for the default of another. (See OBLIGEE, PRINCIPAL, and SURETY)
Contract, under the terms of which a guarantor assumes responsibility with respect to the creditor for fulfillment of the commitment of a debtor. The contract represents a unilateral obligation on the part of the guarantor, while the creditor only has rights under the terms of the contract. The suretyship presupposes the existence of a principal debt, to which the suretyship is incidentally bound.