When a contractor defaults, a battle usually ensues among the contractor's creditors over the limited funds generated by a performance bond. Often, creditors attempt to hold the insurance company (surety) liable for total completion, usually an amount beyond that predetermined in the penal sum of the bond. Under certain circumstances, courts have ignored the penal sum and held the surety liable for completion of the project. This article discusses options from which sureties may choose to remedy the default, assumption of the contract by the surety, and breach of the surety's obligation to perform. Guidelines for representing an owner with a claim on a surety bond are presented. Includes 61 references.