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bond

bond definition - legal

A written promise to pay or forfeit money or perform some act upon the occurrence or nonoccurrence of a specific act or the passage of a specified amount of time. See also indenture.

appeal bond

A bond required of the appellant in a civil case to ensure that the appelleeÂ’s costs will be paid if the appeal is dropped or unsuccessful.

bail bond

A bond given to a court by a surety to secure the release of a criminal defendant from incarceration and to guarantee the defendantÂ’s future appearance in court, when required, during the criminal proceeding pending against him. See also bailsman.

bearer bond

A bond payable to whomever has possession of it. Whenever possession is transferred, so is also the ownership of the bond and the entitlement to the repayment of the debt and accompanying interest payments.

blanket bond

A bond, frequently in the form of a fidelity bond, to protect against the wrongful action of one or more of a group or class of individuals. For example, a summer camp for children might provide a blanket bond against acts of child abuse by any of its camp counselors.

completion bond

A bond to guarantee that a contractor will complete a project according to the terms of a contract. In the event of the contractorÂ’s default, the surety may complete the project or pay damages to the aggrieved party up to the amount of the limits of the bond. Also called performance bond.

convertible bond

A bond that, under specified circumstances, can be exchanged for shares of stock in the corporation that issued the bond.

fidelity bond

A bond to protect against the loss caused by the wrongful conduct of an employee.

fiduciary bond

A bond required of a trustee, administrator, executor, guardian, conservator, or other fiduciary to protect against the loss caused by misconduct during the performance of the personÂ’s duties.

general obligation bond

A government bond for which repayment is to be made from general tax revenues rather than from any specific fund or from the proceeds of any specific civic improvements or project. Also called a bond for general purposes.

judicial bond

A bond to protect the adverse party in a civil case against the loss caused by any delay or inability to utilize property as a result of the lawsuit.

junk bond

A corporate bond that pays high interest, because the company issuing it has a great risk of going out of business.

municipal (or state) bond

A bond issued or guaranteed by a local or state government or governmental body.

payment bond

A bond to ensure that the employees, subcontractors, and suppliers of materials for a general contractor on a construction project will be paid by the bonding company, which acts as an insurer, if the contractor fails to pay them.

peace bond

A bond required by a court of a person who has previously engaged in public disturbances or disorderly conduct or has threatened to do so again to ensure that, if she breaches the peace in the future, she will pay the court an amount up to the limits of the bond. See also breach and conduct.

penal bond

A bond to secure payment of a specified sum as a penalty if an obligation is not met. Often used to ensure that the terms of a contract are performed. Also called a penalty bond.

personal bond

A bond issued by the party whose own potential action or default will trigger the payment or forfeiture of money up to the limits of the bond. See also surety bond.

registered bond

A bond that is not payable to an individual only because he or she has possession of the certificate evidencing the bondÂ’s existence, but instead is payable only to whomever the issuerÂ’s records indicate is the owner of the bond.

evenue bond

r A bond issued to raise funds for a specific project. The money used to repay the debt can derive only from the proceeds of that project.

serial bond

One of several bonds issued at the same time, each of which has a different maturity date.

series bonds

A group or groups of bonds issued as a result of the same bond indenture, but offered to the public at different times and with different maturity dates and interest rates.

supersedeas bond

A bond required of the losing party in a civil action for the amount of the judgment. The bond is frequently a requirement for delaying the execution of the judgment while the losing party is appealing the case. Also called supersedeas.

surety bond

A bond provided, usually for a fee, by one party, such as an insurance company, to protect against the potential actions or default of another party, by guaranteeing to perform certain acts or to pay an amount up to the limits of the bond if the other party acts or fails to act as prescribed in the bond. Also called a suretyship bond. See also surety and suretyship.
A long-term, interest-bearing instrument, in the form of a certificate, issued to the public by a corporate or governmental entity as a way to borrow money. The obligor promises to repay the money on or before a specific date and makes regular interest payments until then. The owner of the bond is not a stockholder and has no ownership interest in the entity, but is only a creditor, and the debt is often secured by a lien on the entityÂ’s property. See also debenture.