### Question
How is the "principal" defined?


### Answer
The term **principal** is defined in *15 U.S.C. § 694a* as follows -

> (A) in the case of a bid bond, a person bidding for the award of a contract, or (B) the person primarily liable to complete a contract for the obligee, or to make payments to other persons in respect of such contract, and for whose performance of his obligation the surety is bound under the terms of a payment or performance bond

#### Citation:
  - *15 U.S.C. § 694a*
  - Heading: **CHAPTER 14B-SMALL BUSINESS INVESTMENT PROGRAM > SUBCHAPTER IV&ndash;A-GUARANTEES > Part B-Surety Bond Guarantees**

