In the fidelity bond contract, what is Aces Inc. considered?

In a fidelity bond contract, Aces Inc. is typically regarded as the principal. The principal is the party that is bonded under the fidelity bond, which means they are the individuals or businesses that have responsibilities or obligations potentially covered by the bond.

In the context of fidelity bonds, the prime function of the bond is to protect a third party, typically the obligee, from losses arising from dishonest acts of the principal, such as theft or fraud. The obligee is the entity that requires the bond and has a stake in the performance of the bonded party (the principal).

Understanding this framework is vital: while the principal is the one who is performing or failing to perform duties, the obligee is the party that might suffer a loss due to the principal's actions and is the one who benefits from the pledge of the surety. The surety acts as a guarantor who promises to fulfill the obligations owed to the obligee if the principal fails to do so.

In summary, within a fidelity bond contract, Aces Inc. is the principal, which means they are the entity whose conduct is being insured against potential dishonest acts.