Some municipalities in the state of Texas require peddlers and solicitors to hold surety bonds as a prerequisite to conducting business in their city in order to protect the state and customers from misrepresentation and damage. These bonds are typically inexpensive, for instance, $100 or less for a bond worth $1,000. Bond amounts are determined by the municipality in which the seller operates. They ensure that principals conduct business in accordance with all laws and rules and regulations. If the principal fails to do this and violates any terms of the surety bond agreement, the bond protects the city from financial loss up to the full penal sum of the bond.