咩叫 Surety Bond & Demand Bond?

A surety bond is a contract among at least three parties:

The principal - the primary party who will be performing a contractual obligation
The obligee - the party who is the recipient of the obligation, and
The surety - who ensures that the principal's obligations will be performed.
Through this agreement, the surety agrees to uphold - for the benefit of the obligee - the contractual promises (obligations) made by the principal if the principal fails to uphold its promises to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal and guarantee performance and completion per the terms of the agreement.

There are two main categories of bond types: contract bonds and commercial bonds. Contract bonds guarantee a specific contract. Examples include performance, bid, supply, maintenance and subdivision bonds. Commercial bonds guarantee per the terms of the bond form. Examples include license & permit, union bonds, etc.


Demand bond is an independent banking obligation requiring the obligor to pay up to the full amount stated in the bond on demand by the employer. A bond of this type will generally be in short form and expressed to become payable on demand or on your first demand. Payment must normally be made notwithstanding protests by the contractor and without any requirement on the part of the employer to establish a breach of contract or that any damages have in fact been suffered.

The contractor has no defense against a call on such a bond other than proven fraud and there can be no effective challenge to the employer’s demand.

Such bonds have been used as a lever by employers when a contractual dispute has arisen entitling the contractor to additional payments. Though an improper call on the bond in these circumstances might well jeopardize the solvency of the contractor, the contractor cannot take any action to prevent payment. Even an employer owing substantial sums to the contractor can make demand for immediate payment.