Question

Joe smith hired by john jones to build a building. joe is bonded by abc insurance company. which correctly identifies surety, principal, obligee?

a. ABC - Surety; Joe Smith - Principal; John Jones - Obligee
b. John Jones - Surety; ABC - Surety
c. ABC - Surety; John Jones - Principal; Joe Smith - Obligee
d. Joe Smith - Surety; ABC - Principal

Answer 1

ABC Insurance Company is the surety, Joe Smith is the principal, and John Jones is the obligee. ABC guarantees performance, Joe is responsible for building the structure, and John receives the promise and can claim on the bond if the contract is breached.

Step-by-step explanation:

The question asks about the identification of the surety, principal, and obligee within a bonding scenario. In this contract, Joe Smith has been hired by John Jones to build a building, and Joe Smith is bonded by ABC Insurance Company. The correct identification of each party's role is:

• ABC Insurance Company is the surety, as they guarantee Joe's performance and compliance with the contract.
• Joe Smith is the principal, as he is the party responsible for fulfilling the contract's obligations.
• John Jones is the obligee, since he is the party that receives the promise of performance and has a right to claim against the bond if Joe fails to meet his obligations.

Therefore, the correct answer is: a. ABC - Surety; Joe Smith - Principal; John Jones - Obligee.