Which party benefits from the surety bond?

The obligee is the party that benefits from a surety bond because the bond serves as a guarantee that the principal will fulfill their obligations as stipulated in a contractual agreement. When a surety bond is in place, it provides financial protection to the obligee against losses that may arise from the principal's failure to comply with the terms of that agreement or fulfill their obligations. If the principal defaults, the surety company steps in to compensate the obligee for losses, ensuring that they are protected and can recover their investment or damages. This framework is crucial in various industries, including construction and service contracts, where financial assurance and trust between parties are fundamental to successful project execution.