A surety bond, also known as a guaranty bond or a fidelity bond, is a type of contract designed to protect parties involved in a business transaction. It's a financial agreement between three parties, the principle, the obligee, and the surety. The principle promises to fulfill a particular commitment to the obligee, and the surety guarantees that the principle will fulfill their obligation. Other synonymous terms include fidelity guarantee bond, business service bond, performance bond, and contract bond. Regardless of terminology, surety bonds ensure that business transactions are completed in compliance with all relevant laws and regulations, and provide protection and security to those involved.