What is the primary obligation of a surety upon the default of the principal?

The primary obligation of a surety upon the default of the principal is to carry out the terms of the contract. This means that when a principal fails to fulfill their obligations under a contract—such as completing a construction project or adhering to specifications—the surety is responsible for ensuring that the terms of the original agreement are met. This can be achieved by completing the work themselves, hiring another contractor to finish the project, or providing the necessary funds to cover the default.

This obligation exists because the surety bond serves as a guarantee to the project owner that the contractor will perform their duties as agreed. By assuming this responsibility, the surety protects the interests of the obligee (typically the project owner) and fulfills the risk they took on when they issued the bond in the first place. The other options do not accurately reflect the surety's role and obligations in the event of a default by the principal. For example, renegotiating contract terms or simply releasing the principal from responsibility does not align with the surety's role as a guarantor for the performance of contractual obligations.