A surety bond is a contract surrounded by the following three parties. The primary party (who will be performing a contractual obligation) is known as the principal; the obligee is the party who is the recipient of an obligation, and the surety, who ensures that the principal's obligations will be performed. By means of an agreement like this, the surety agrees to sustain for the benefit of the obligee. The penal sum is a specified amount of the money which is the maximum amount that the surety w