A surety, surety bond or guaranty, in finance, is a promise by
one party to assume responsibility for the debt obligation of a
borrower if that borrower defaults. The person or company that
provides this promise, is also known as a surety or guarantor.
The situation in which a surety is most typically required is
when the ability of the primary obligor or principal to perform
its obligations to the obligee (counterparty) under a contract
is in question, or when there is some public or private interest
which requires protection from the consequences of the
principal's default or delinquency. In most common law
jurisdictions, a contract of suretyship is subject to the
Statute of Frauds (or its equivalent local laws) and is only
enforceable if recorded in writing and signed by the surety and
the principal. In the United States, a surety bond may be
required for certain federal projects due to the Miller Act; in
addition, many states have adopted their own "Little Miller
Acts". The surety transaction will typical