A surety bond is a legal document that obligates a person or business to fulfill a contract or promise. Surety bonds are typically legal binding contracts that ensure that compensation will be paid if the contract is violated or if any due promises are not met. Surety bonds may also be used to assure government contracts are carried out, to protect businesses from employee dishonesty or to ensure that government contracts are successfully completed. In the business world, surety bonds may be required for many different types of transactions. Some examples include obtaining a mortgage, opening a business, opening a retail business and opening a professional service such as a chiropractor’s office.
A mortgage is a way to finance a home or a property. This contract establishes that the lender is willing to allow the borrower to use the property as security for the mortgage. Without a mortgage, the lender could lose the money it loaned to the borrower if the property was not secured by something that could be turned into collateral. The two main types of mortgage are residential and commercial. In order to get a mortgage, what is a surety bond is used as a third party to guarantee the lender will pay the mortgage if the borrower defaults.
A surety bond is also used in employee dishonesty cases. For example, an employer who wants to hire a new employee must do background checks to make sure the prospective employee has not had previous employee reprimands or fines. The same would go for an employer who needs to hire someone to work in the company’s warehouse because of an injury that employee was responsible for. These background reports often include what is called an ACB, or Assumed Name Certificate.
There are many other reasons an employer needs to find out about what is a surety bond, and they can use it to help ensure the person they want to hire is honest and won’t have past cases that are considered misconduct. Another reason employers use these contracts is to help protect their business from fraud. If a person is hired without a surety bond, the employer runs the risk that the person could lie on their job application or say one thing when they really mean another. This could cost the business money, or even expose the business to a lawsuit. To protect themselves from this, companies will require people to sign contracts that allow them to be sure the person will not lie on their resume or at a job interview.
A contract surety bond term refers to how long an applicant has to fulfill the requirements of the contract. Most applicants have 30 days to fulfill the obligations in a bond contract. When the time to fulfill the requirements has passed, if the applicant still has not completed them, the employer has the option to go to court and request a stay of execution. Once the courts have determined that an applicant has not fulfilled the contract, the court will issue an eviction notice, which gives the employer up to three days to find a new tenant to occupy the property.
What is a surety bond typically used for is when an employer has employees that are suspected of theft or what is commonly referred to as theft insurance. An employee dishonesty bond is used to prevent employees from stealing during working hours. Surety bond contracts typically state that the employee must submit to a background investigation, fingerprinting, and any other forms of verification before the employee can get the bond.
What is a surety bond typically used for is when an applicant applies for employment with a company. When applying for a position with any company, an applicant must fill out a three-party contract that explains the type of obligations that come with being a future employee with that company. The three-party contract gives the employer and applicant protection from the obligations listed in the contract. In the event that the applicant violates the contract, the employer has the option to fire the applicant on the grounds that the applicant has violated the contract. The contract typically states that the employee will be required to reimburse the company for all legal costs if the employee is terminated. As a result, the employee will usually have to post a bond, which is typically held by a surety bond company, and will have to abstain from performing any duties with the company until the bond is paid off.
What is a contract surety bond generally used for, is when there is a pending litigation. When litigation occur, there is often a need for the litigants and/or their attorneys to have access to the records of both parties in order to determine what exactly happened during the time frame that a lawsuit was filed. If litigants are unable to obtain the records, they will have to either pay the other party’s legal costs, or use a surety bond company to guarantee that they receive access to these records.