BONDS

I.     DEFINITIONS.

A bond is a certificate of obligation, usually an evidence of debt. It is a form of contract that is almost infinite in variety. The parties to the bond are the obligor and the obligor. The obligee is the one who makes the promise and the obligor is the person to whom the promise is made.

II.     EXAMPLES.

        A.     SIMPLE BOND.

This is an instrument promising payment of money at a certain time, and generally bears interest at the rate specified in the bond. Nearly all corporate and municipal bonds are of this character and contain no condition except for the payment of the amount of the bond at a certain time and place with a certain specified rate of interest. Frequently interest coupons are attached to the original bond, providing for the payment of the several installments of interest as they come due.

        B.     SURETY BONDS.

Surety bonds are obligations to pay a certain sum of money on condition that if the bonded person-the obligor-faithfully performs his duties, the obligation is void. This type of bond is in common use for a variety of purposes. All state, county, town, and city officers who handle public funds must give bond to assure the honest and proper performance of their official duties.

        C.     BUSINESS BOND.

Officers of corporations are often required o give surety bonds for the faithful performance of their duties.

        D.     INDEMNIFYING BONDS.

Bonds are also frequently given to indemnify persons who incur liability for another in many other walks of life.

        E.     EXECUTOR'S BOND.

Executors, administrators, guardians, and conservators are required to enter into bonds to be approved by the proper court before they are allowed to enter upon their duties as such. The forms for such bonds, however, vary in the different states.