In litigation, which type of bond protects the opposing party from loss if the principal fails to show entitlement?

The correct choice is related to a type of bond specifically designed to protect the interests of the opposing party in litigation. When a court bond is posted, it serves as a guarantee that the party who posted the bond will comply with the court's decision. This is particularly relevant in situations involving appeals or certain legal actions where one party's failure to fulfill their obligation could lead to financial loss for the other party.

In a litigation context, if a principal fails to demonstrate their entitlement to a particular claim, the court bond provides assurance to the opposing party that they will be compensated for any losses incurred due to that failure. This is essential for maintaining fairness in legal proceedings.

Other types of bonds mentioned have different purposes. For instance, a performance bond guarantees that a contractor will fulfill their contractual obligations, while a contract bond ensures that terms of a contract are upheld. A bail bond is specifically associated with securing the release of an arrested individual from custody and ensuring their appearance in court. Thus, only the court bond serves the distinct role of financially safeguarding the opposing party within a legal context.