What is the term used to refer to a special form of contract whereby one party guarantees the performance by a second party of certain obligations and what is the term used to refer to the first party?

What is the term used to refer to a special form of contract whereby one party guarantees the performance by a second party of certain obligations and what is the term used to refer to the first party?
A . The contract is a surety and the first party is referred to as the bond.
B . The contract Is a bond and the first party Is referred to as the surety.
C . The contract Is a surety and the first party is referred to as the oblige.
D .   The contract is a bond and the first party is referred to as the principal.

View Answer

Answer: B

Explanation:

The special form of contract where one party guarantees the performance by a second party of certain obligations is called a bond, and the first party in this arrangement is referred to as the surety (Option B). The surety provides a guarantee to the oblige (the party requiring the guarantee) that the principal (the party obligated to perform) will fulfill their contractual obligations. This arrangement is commonly used in construction contracts and other scenarios requiring performance guarantees.