Contract bonds are created for the purpose of proper
completion and performance of the contract. The contract
surety bond is also a type of surety bond. This contract
bonds are required by the statute of the state and federal
government. This bond ensure the obligee that the principal
will perform the contract with respect to the bonding
agreement. This written agreement guarantees the performance
of the contractor. Payment bond and performance bonds
are the commonly used contract bonds. This bond ensures
the performance and fulfillment of the obligation by
the contractor. In default of the contractor with respect
to the contract, the obligee can sue the principal and
the surety in court of law.