{"id":8119,"date":"2017-11-17T22:28:24","date_gmt":"2017-11-17T22:28:24","guid":{"rendered":"https:\/\/reunitethestates.org\/?page_id=8119"},"modified":"2018-05-22T15:30:01","modified_gmt":"2018-05-22T15:30:01","slug":"bond","status":"publish","type":"page","link":"https:\/\/reunitethestates.org\/?page_id=8119","title":{"rendered":"bond – a written promise acknowledging the obligation to pay a debt; either as money or to perform some act if certain circumstances occur or a certain time elapses"},"content":{"rendered":"

\u00a0 \u00a0 \u00a0This page is continued from Legal Instruments<\/a> >>>> Securities<\/a>:<\/span><\/strong><\/p>\n

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bond<\/span>:<\/span><\/span>
\n<\/span><\/strong>n<\/em>. (16c)<\/span><\/p>\n

1.<\/strong> Noun.\u00a0 <\/em><\/span>The obligation secured by a\u00a0 mortgage or deed of trust; a corporate obligation.\u00a0<\/span> 19 Am J2d Corp \u00a7 1059<\/span>; at common law, a sealed instrument or specialty.<\/span>\u00a0 34 Am J1st Lim Ac \u00a7 82<\/span>; an obligation in writing which binds a signatory to pay a sum certain upon the happening of an event and carries a seal, except where controlled by a statue which dispenses with the necessity of a seal.<\/span>\u00a0 12 Am J2d Bonds \u00a7 1<\/span>.<\/span><\/strong><\/span><\/p>\n

So defined, the term is generic, embracing investment bonds<\/a>, penal bonds<\/a>, indemnity<\/a>, fidelity<\/a>, and surety bonds<\/a>.\u00a0<\/span><\/span> 12 Am J<\/span>2d Bonds \u00a7 1<\/span>.<\/span><\/span><\/strong><\/p>\n

Less frequently, the term i used for a bail or a surety.<\/strong> <\/span><\/p>\n

1.<\/strong> Verb<\/em>.\u00a0 To give a bond as security.<\/strong><\/span>
\n\u00a0\u00a0\u00a0\u00a0 See undertaking<\/em>. [1]<\/span><\/p>\n

1. A debt owed by a corporation or the government to an investor.<\/span><\/strong><\/span><\/p>\n

2. The written instrument that evidences a debt. <\/span><\/strong><\/span><\/p>\n

3. An obligation to pay a sum of money upon the happening of a stated event.<\/span><\/strong><\/span><\/p>\n

4. A debt secured by a mortgage.<\/span><\/strong> [2]<\/span><\/span><\/p>\n

1. An obligation; a promise.\u00a0<\/span><\/strong>[3]<\/span><\/span><\/p>\n

\u00a0 \u00a0 \u00a0Excerpt from Frederick Pollock & Frederic W. Maitland’s\u00a0The History of\u00a0<\/em><\/a>English Law<\/em>\u00a0(2d ed. 1899):<\/span><\/strong><\/span><\/p>\n

\u00a0 \u00a0 \u00a0\u201c<\/span>[A]n obligation, or in English a \u2018bond,\u2019 is a document written and sealed containing a confession of a debt; in later times \u2018contract\u2019 is the genus, \u2018obligation\u2019 the species.<\/span>”\u00a0<\/span><\/span><\/strong>[4]<\/span><\/p>\n

\n

2. A written promise to pay money or do some act if certain circumstances occur or a certain time elapses; a promise that is defeasible upon a condition subsequent; especially, an instrument under seal by which <\/span><\/strong><\/span><\/p>\n

(1) a public officer undertakes to pay a sum of money if he or she does not faithfully discharge the responsibilities of office, or
\n(2) a surety undertakes that if the public officer does not do so, the surety will be liable in a penal sum.\u00a0<\/span><\/strong>[3]<\/span><\/span><\/p>\n

\u00a0 \u00a0 \u00a0Excerpt from Silvester E. Quindry,<\/span> Bonds & Bondholders: Rights & Remedies<\/em><\/a>\u00a0(1934):<\/span><\/span><\/strong><\/p>\n

\u00a0 \u00a0 \u00a0\u201c<\/span>The fact that an instrument is called a \u2018bond\u2019 is not conclusive as to its character.\u00a0 It is necessary to disregard nomenclature and look to the substance of the bond itself.\u00a0 The distinguishing feature of a bond is that it is an obligation to pay a fixed sum of money, at a definite time, with a stated interest, and it makes no difference whether a bond is designated by that name or by some other, if it possesses the characteristics of a bond.\u00a0 There is no distinction between bonds and certificates of indebtedness which conform to all the characteristics of bonds.<\/span>\u201d <\/span><\/strong>[5]<\/span><\/p>\n

Various Types of Bonds:<\/span><\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0 Many bonds, depending on their precise terms, may properly be included in more than one classification.<\/strong> [2]<\/span><\/p>\n

Various Types of Investment Bonds:<\/span><\/strong><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Bonds that represent debt and pay interest<\/em><\/span> are called investment bonds. <\/span><\/strong>[2]<\/span><\/span><\/p>\n

investment bonds<\/span><\/a> – bonds that represent debt and pay interest.<\/span><\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0 Examples<\/em> of investment bonds issued by corporations include convertible bonds, coupon bonds, guaranteed bonds, registered bonds, serial bonds, and term bonds.\u00a0 (Also see junk bonds<\/em>.) [2]<\/strong><\/span><\/p>\n

convertible bond<\/span><\/a> – a bond or<\/span> debenture<\/a> issued with the privilege of converting them into other securities, usually the common stock of the issuing corporation.<\/span><\/span><\/strong><\/p>\n

coupon bond<\/span><\/a> – a bond in which the interest, which is payable separately from the principal, is represented by detachable coupons.<\/span><\/span><\/strong><\/p>\n

guaranteed bond<\/span><\/a> – a bond issued by a corporation and guaranteed by a third party (sometimes by a parent corporation).<\/span><\/span><\/strong> \u2014 aka<\/span> endorsed bond<\/em><\/span><\/strong><\/span>;<\/span> assumed bond<\/em><\/span><\/strong><\/span>;<\/span> joint bond<\/em><\/span><\/strong><\/span>.<\/span><\/p>\n

junk bond<\/span><\/a> – a bond that pays interest at a high rate because of significant risks \u2014 often issued to raise money quickly in order to buy the shares of another company.<\/span><\/strong><\/span><\/p>\n

registered bond<\/span><\/a> – a bond or security which specifies a person entitled to the security or to the rights it evidences and the transfer of which may be registered upon books maintained for that purpose or on behalf of an issuer. <\/span><\/strong>\u2014 aka<\/span> registered security<\/em><\/strong><\/span>.<\/span><\/p>\n

serial bonds<\/span><\/a> – bonds of a corporation or a municipality issued at the same time but redeemable at different specified dates.<\/strong><\/span><\/p>\n

term bonds<\/span><\/a> – bonds issued at one time, all of which fall due at one time.<\/span><\/strong><\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Unsecured, long-term corporate bonds<\/em><\/span> are called debentures. <\/strong>[2]<\/span><\/p>\n

debenture<\/span><\/a> – voucher representing indebtedness, issued by a corporation, and though unsecured, it is secured only by the debtor\u2019s earning power based on a pledge of income, not by a lien on any specific asset.<\/span><\/span><\/strong><\/p>\n

\u00a0 \u00a0\u00a0 Examples of of investment bonds issued by government include municipal bonds, savings bonds, and school bonds.
\n<\/strong>See government bond.<\/em><\/span><\/p>\n

government bond<\/span> –<\/span>\u00a0A bond issued by a\u00a0 government. <\/span><\/strong>[2]<\/span><\/span><\/p>\n

municipal bond<\/a><\/span> – a tax-exempt, negotiable bond which serves as an evidence of indebtedness issued as one of a series of instruments issued at the same time by a nonfederal government or governmental unit in order to finance state or local improvements.<\/span><\/strong><\/span><\/p>\n

Types of Bonds that are
\nObligation to Pay Money
\nif a certain Event Takes Place:<\/span><\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 Bonds that are obligation to pay money if a certain event takes place<\/em><\/span> are generally classified either as surety bonds (which includes bail bonds and performance bonds), fidelity bonds (payable in the event of employee dishonesty, e.g., embezzlement), indemnity bonds, or penal bonds.<\/span><\/strong> [2]<\/span><\/span><\/p>\n

fidelity bond<\/span><\/a> – a bond in the form of an insurance contract which indemnifies an employer or business for loss due to embezzlement, larceny, or gross negligence by an employee or other person holding a position of trust.<\/span><\/strong><\/span><\/p>\n

indemnity bond<\/a><\/span> – a bond to reimburse the holder for any actual or claimed loss caused by the issuer\u2019s or some other person\u2019s conduct.<\/span><\/strong><\/span><\/p>\n

penal bond<\/span><\/a> – a bond conditioned upon the performance of duties of office, or other obligations undertaken by the principal obligor in the bond or collateral things to be done by him.<\/span><\/strong><\/span><\/p>\n

surety bond<\/span><\/a> – a bond that secures the performance of an obligation<\/span><\/strong><\/span><\/p>\n