What is bond execution and how bond get forfeited ?

What is bond execution and how bond get forfeited?

Bond execution refers to the process of enforcing a financial guarantee, usually in the form of a bond, when certain conditions are not met. A bond is a legal agreement that ensures one party will fulfill specific obligations, and if they fail to do so, the other party can claim compensation from the bond.

A bond can get forfeited when the terms and conditions outlined in the bond agreement are violated. This could include situations such as non-payment, failure to perform contractual obligations, or any other breach of the agreed-upon terms. When a bond is forfeited, the party that issued the bond (the surety) is required to pay the beneficiary (the party protected by the bond) a specified amount, up to the bond's value. The forfeited amount serves as compensation for the losses incurred due to the default or breach of contract.