A Surety Bond is a legally binding contract between three parties — the principal, the surety, and the obligee. It serves as a guarantee that the principal will fulfil certain obligations, such as completing a project, paying debts, or adhering to regulations. If the principal fails to meet these obligations, the surety compensates the obligee for any financial loss incurred, subject to the bond's terms. However, the principal is ultimately responsible for repaying the surety.