states have adopted their own "Little Miller Acts". The surety transaction will typically involve a producer; the National Association of Surety Bond Producers (NASBP) is a trade association that represents such producers. Right of subrogation If the surety is required to pay or perform due to the principal's failure to do so, the law will usually give the surety a right of subrogation, allowing the surety to "step into the shoes of" the principal and use the surety's contractual rights to recover the cost of making payment or performing on the principal's behalf, even in the absence of an express agreement to that effect between the surety and the principal. Distinction between a suretyship arrangement and a guaranty Traditionally, a distinction was made between a suretyship arrangement and that of a guaranty. In both cases, the lender gained the ability to collect from another person in the event of a default by the principal. However, the surety's liability was joint and primary with the principal: the creditor could attempt to collect the debt from either party independently of the other. The guarantor's liability was ancillary and derivative: the creditor first had to attempt to collect the debt from the debtor before looking to the guarantor for payment. Many jurisdictions have abolished that distinction, in effect putting all guarantors in the position of the surety. Contract surety bonds Contract bonds, used heavily in the construction industry by general contractors as a part of construction law, are a guaranty from a surety to a project's owner (obligee) that a general contractor (principal) will adhere to the provisions of a contract. The Associated General Contractors of America, a United States trade association, provides some information for their members on these bonds. Contract bonds are not the same thing as contractor's license bonds, which may be required as part of a license. Included in this category are bid bonds (guaranty that a contractor will enter into a contract if awarded the bid); performance bonds (guaranty that a contractor will perform the work as specified by the contract); payment bonds (guaranty that a contractor will pay for services, particularly subcontractors and materials and particularly for federal projects where a mechanic's lien is not available); and maintenance bonds (guaranty that a contractor will provide facility repair and upkeep for a specified period of time). There are also miscellaneous contract bonds that do not fall within the