What obligation does the principal have in a surety bond?

In the context of a surety bond, the principal is primarily obligated to perform the agreed task, which is the core purpose of the bond. The principal is the party who is responsible for fulfilling the obligations of a contract, such as completing a construction project or adhering to any specified terms in an agreement.

When a surety bond is in place, it essentially acts as a guarantee for the obligee (the party requiring the bond) that the principal will carry out their duties as stipulated. If the principal fails to meet these obligations, the surety company that issued the bond steps in to fulfill the obligation or compensate the obligee, thereby protecting them from potential losses.

While the principal may have other responsibilities that can include indemnifying the surety or facilitating financing, these do not encompass the most immediate and fundamental obligation defined by the existence of the bond, which is the performance of the agreed task. Thus, the principal's commitment to complete the work or task as agreed is central to the purpose and function of a surety bond.