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A document with which one party promises to pay another within a specified amount of time. Bonds are used for many things, including borrowing money or guaranteeing payment of money.
(2) A security that obligates the issuer to repay the principal amount upon maturity and to make specified interest payments over specified time intervals to the bond holder. The issuer can be a corporation or a governmental entity. A bond is a debt obligation; the bondholder is a lender to the issuer and there is no ownership position.
(3) An insurance policy required by a court for the benefit of a trust or an estate. This policy provides insurance protection against the possibility of fraud or embezzlement by a trustee or an executor. The will maker may request in the will that no bond be required.
An obligation or bond is a deed whereby the obligor, obliges himself, his heirs, executors and administrators, to pay a certain sum of money to another at a day appointed. If this be all, the bond is called a single one, simplex obligatio; but there is generally a condition added, that if the obligor pays a smaller sum, or does, or omits to do some particular act, the obligation shall be void. The word bond ex vi termini imports a sealed instrument. It is proposed to consider: 1. The form of a bond, namely, the words by which it may be made, and the ceremonies required. 2. The condition. 3. The performance or discharge.
There must be parties to a bond, an obligor and obligee; for where a bond was made with condition that the obligor should pay twenty pounds to such person or persons; as E. H. should, by her last will and testament in writing, name and appoint the same to be paid, and E. H. did not appoint any person to, whom the same should be paid, it was held that the money was not payable to the executors of E. H. No particular form of words are essential to create an obligation, but any words which declare the intention of the parties, and denote that one is bound to the other, will be sufficient, provided the ceremonies mentioned below have been observed.
It must be in writing, on paper or parchment, and if it be made on other materials it is void.
It must be sealed, though it is not necessary that it should be mentioned in the writing that it is sealed. As to what is a sufficient sealing, see the above case, and the word Seal.
It must be delivered by the party whose bond it is, to the other. But the delivery and acceptance may be by attorney. The date is not considered of the substance of a deed, and therefore a bond which either has no date or an impossible one is still good, provided the real day of its being dated or given, that is, delivered, can be proved.
The condition is either for the payment of money, or for the performance of something else. In the latter case, if the condition be against some rule of law merely, positively impossible at the time of making it, uncertain or insensible, the condition alone is void, and the bond shall stand single and unconditional; for it is the folly of the obligor to enter into such an obligation, from which he can never be released. If it be to do a thing malum in se, the obligation itself is void, the whole contract being unlawful.
When, by the condition of an obligation, the act to be done to the obligee is of its own nature transitory, as payment of money, delivery of charters, or the like, and no time is limited, it ought to be performed in convenient time.
A payment before the day is good; or before action brought.
If the condition be to do a thing within a certain time, it may be performed the last day of the time appointed.
If the condition be to do an act, without limiting any time, he who has the benefit may do it at what time he pleases.
When the place where the act to be performed is agreed upon, the party who is to perform it, is not obliged to seek the opposite party elsewhere; nor is he to whom it is to be performed bound to accept of the performance in another place.