Surety Agreement
What this document covers
A surety agreement is a legal document that establishes the responsibility of a surety to pay a debt or fulfill an obligation if the principal fails to do so. This form is designed for situations where a surety guarantees the obligations of another party, offering additional security to the obligee. Unlike general contracts, this agreement specifically outlines the financial assurances between the parties involved.
Form components explained
- Agreement date and involved parties
- Surety's commitment to act on behalf of the principal
- Financial qualifications of the surety, including an asset listing
- Details of the obligation and liability limitations
- Notice provisions for the obligee
- Execution section for signatures
Situations where this form applies
This form should be used when an individual or business seeks to secure a financial obligation for another party. It is particularly relevant in scenarios like construction projects, loan agreements, or other contractual obligations where the surety's financial backing adds a layer of security for the obligee.
Who needs this form
- Businesses requiring financial assurance for contracts
- Individuals acting as sureties for friends or family
- Obligees wanting to ensure secure performance of obligations
- Contractors needing a guaranteed payment source
How to complete this form
- Identify and enter the agreement date.
- Clearly specify the names and addresses of the surety and principal.
- Detail the financial qualifications and obligations under the contract.
- Outline the scope and limitations of the surety's liability.
- Obtain signatures from all parties involved to finalize the agreement.
Is notarization required?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
Common mistakes
- Failing to include all party details completely.
- Not stating precise obligations or amounts in the agreement.
- Omitting required signatures or dates at execution.
- Ignoring local state requirements that may modify language or terms.
Benefits of using this form online
- Convenience of completing the form from anywhere at any time.
- Editability allows for customization to fit specific needs.
- Access to professionally drafted content ensures legal validity.
Form popularity
FAQ
This means, a $75,000 surety bond will cost a good credit applicant somewhere between $562 and $1,875. For a bad credit applicant the cost will be in the range between $1,875 and $7,500. Here is a breakdown of what your premiums are likely to be based on your credit score.
At its simplest, a surety bond requires the surety to pay a set amount of money to the obligee if a principal fails to perform a contractual obligation.The surety bond requires the principal to sign an indemnity agreement that pledges company and personal assets to reimburse the surety if a claim occurs.
On average, the cost for a surety bond falls somewhere between 1% and 15% of the bond amount. That means you may be charged between $100 and $1,500 to buy a $10,000 bond policy. Most premium amounts are based on your application and credit health, but there are some bond policies that are written freely.
Obligee a person or organization to whom another party (the "obligor") owes an obligation. In a bonding situation, this is the party that requires and receives the protection of the bond.
When it comes to surety bonds, you will not need to pay month-to-month. In fact, when you get a quote for a surety bond, the quote is a one-time payment quote. This means you will only need to pay it one time (not every month).Most bonds are quoted at a 1-year term, but some are quoted at a 2-year or 3-year term.
The principal is the party being required to obtain the surety bond by the obligee. When filling out a surety bond application, you are the principal. The obligee requires the principal to obtain a surety bond to ensure they uphold their end of the agreement.
Examples of these bonds include construction and environmental performance, payment, supply, maintenance, and warranty bonds. Commercial surety helps obtain capacity at the lowest cost for all corporate surety needs.International surety examines the unique surety requirements internationally.
The cost of your $50,000 surety bond depends mostly on your personal credit score. Applicants with good credit usually pay premiums between 0.75% and 2.5%, which means between $375 and $1,250 per year. Applicants with bad credit, on the other hand, pay premiums in the range of 2.5% to 10%, or between $1,250 and $5,000.
On average, the cost for a surety bond falls somewhere between 1% and 15% of the bond amount. That means you may be charged between $100 and $1,500 to buy a $10,000 bond policy. Most premium amounts are based on your application and credit health, but there are some bond policies that are written freely.