Surety Bond - Definition - Law Dictionary Home Dictionary Definition surety-bond

Definition :

Surety bond, a surety bond is a contract and it is a question as to how far its terms can be considered to have been varied by any unilateral act. Each bond has to be construed on its own terms. But in construing the terms of a surety bond for the production of an accused person, the purpose and object of executing it must be kept in view. Such a bond is executed for the purpose of ensuring the presence of the accused concerned in Court in which he is standing his trial for a criminal offence at the hearing of the case. But for the execution of such a bond, the accused would have to remain in custody so that the trial may proceed smoothly, State of Maharashtra v. Dadamiya Babumiya Sheikh, AIR 1971 SC 1722 (1724): (1972) 3 SCC 85.

In the case of fidelity guarantees the security is discharged if a material alteration takes place in the risk, e.g., change of duties, Pybus v. Gibb, (1856) 6 E&B 902, or upon non-disclosure by the person to whom the guarantee is given of a matter affecting the contract, such as dishonesty of the employee, see Phillips v. Foxall, (1872) LR 7 QB 666, and see Partnership Act, 1890, s. 18; also MERCANTILE LAW AMENDMENT ACT, 1856; GUARANTY.