Which of the following is NOT a consequence of defaulting on a Surety Bond?

Immediate contract modification is not a consequence of defaulting on a Surety Bond. When a principal defaults, the surety is called upon to fulfill the obligations of the contract. However, default does not inherently trigger an immediate change in the terms of the original contract. Instead, the surety typically steps in to cover the default and ensure that the contractual obligations are satisfied, which may involve financial compensation or finding someone to complete the work.

The other consequences, such as legal repercussions for the principal, reputation damage for the surety, and potential claims against the principal, are all direct outcomes of defaulting on a bond. Legal repercussions may arise as the principal may face lawsuits or penalties from the obligee. The surety can also suffer damage to its reputation because its ability to manage risk and fulfill obligations might be questioned. Additionally, claims against the principal can be made by the surety when it has to pay out on the bond, leading to financial liability for the principal. Thus, these consequences directly relate to the implications of defaulting on a surety bond and emphasize the seriousness of maintaining obligations under the bond.