Supply bonds are the guaranteed bond for the supply
of material and labor as furnished in the contract.
This bond is imposed for the benefit of the principal.
This bond ensures the faithful performance of the supplier
with regards to supply of material and labor. This bond
is created between the supplier and the principal for
the faithful performance of the obligation. These types
of bonds are mostly required by the contractor. In failure
of the performance of the supplier, this bond enables
the principal to claim the losses in the court of law.
This bond is also said as performance bond.