In a bond, who is referred to as the one paying the bills?

In the context of a bond, the party referred to as the one paying the bills is known as the obligee. The obligee is typically the entity that requires the bond to ensure that the principal fulfills their obligations, such as completing a project or adhering to contractual terms. In a contractual setting, the obligee may be a project owner, a government agency, or another stakeholder who has an interest in guaranteeing that certain conditions are met.

The obligee is concerned with being compensated for any potential losses that could arise from the principal's failure to meet their obligations. Therefore, they engage with the surety—who provides the bond—to ensure that the principal fulfills their responsibilities, often resulting in financial security for the obligee.

Understanding this role is essential in the bonding process, as it highlights the relationship and responsibilities between the different parties involved in a bond.