BONDS

Preliminary Note
Para 801 803

A: NATURE AND FORM OF BONDS 1 Definition and terms 2 Bonds and covenants . B: VARIETIES OF BONDS 3 4 5 6 7 8 9 Common money bonds Post obit bonds . Lloyd's bonds . . Arbitration bonds Replevin bonds . Admiralty bail bonds Annuity bonds . . .

804 805 806 807 808 809 810

C: ASSIGNMENT OF BONDS 10 Assignment at law 11 Assignment in equity 12 Estoppel of assignor . 811 812 813

Precedents
A: BONDS FOR PAYMENT OF MONEY 1 Bond from one obligor to one obligee to pay a sum of money at a stated date or on demand 2 Bond by two or more obligors to one or more obligees jointly. . . . . . . .. 3 Bond by several obligors with common penalty but conditioned on the payment of separate sums . . . . . . . . . . . . . . . . . . . . . . . . . . . " 4 Bond by one obligor to one obligee for payment of a sum by equal instalments with interest, the agreement being recited . . . . . . . . . . . . . . . .. 5 Bond by one obligor to one obligee for payment of a sum by unequal instalments with interest, without recitals . . . . . . . . . . . . . . . . . . . . . .. 6 Bond by a debtor for payment of a debt by instalments, the balance of the debt becoming immediately payable on default in payment of any instalment .. 7 Bond by a parent to pay a sum to trustees of marriage settlement as portion 8 Bond by a child for the payment of a sum of money lent by parent and conditioned to be paid on the death of the parent 9 Bond in a sum fixed as liquidated damages to preserve a trade secret . . . " 10 Bond to secure payment of a monthly sum for the grantor's or beneficiary's life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 Bond of submission to arbitration without recitals where all matters in difference are referred. . . . . . . . . . . . . . . . . . . . . . . . . 12 Bond to guarantee mental patient's receiver-guarantee company 13 Bond to guarantee mental patient's receiver-personal sureties B: POST OBIT BONDS 14 Post obit bond for payment of a sum of money in case the obligor survives a relative from whom the obligor has expectations . . . . . . . . . . . . " 836 821 823 824 825 826 827 828 829 830 831 832 833 835

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15 Post obit bond, the transaction being described as a sale and purchase of the sum secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 Post obit bond for payment of a sum of money upon the death of the obligor, the time for payment only being contingent . . . . . . . . . . . . . . ..

837 838

c: BONDS OTHER THAN MONEY BONDS

17 18 19 20 21 22 23 24 25 26 27 28 Bond in replevin where action to be begun in High Court Bond in replevin where action to be commenced in county court Lloyd's bond given by a company. . . . . . . . . . . . . . . Bond to secure the performance of an agreement, without recitals Bond given by contractor to local authority guaranteeing fulfilment of contractual obligations . . . . . . . . . . . . . . . . . . . . . . . . .. Bond for percentage of contract price conditioned to remain in force only until further bond is executed Bond for reduced percentage of contract price following previous bond and part execution of works . . . . . . . . . . . . . . . . . . . . . . . . . . .. Bond by an agent to account and pay over money received . . . . . . . . .. Bond by an employee not to engage in business in competition with employer Bond to secure obedience to an injunction restraining the obligor from trespassing on the lands of the obligee . . . . . . . . . . . . . . . . . . . . . . .. Bond by vendor of land to indemnify purchaser against claims under missing title deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bond by vendor to indemnify purchaser against a particular defect in title. .. 839 840 841 842 843 844 846
847

848 849 850 851

For Annuity, bond to secure payment of see title Bottomry bonds . . . . . . . . . . Building societies, bond by officer of Company bearer bond . . . . . . . Compulsory purchase bond before entry Contractors' bond providing security under the advance payments code in Part XI of the Highways Act 1980 Fidelity bonds . . . . . . . . Local authority bonds . . . . . . . . Partnership, bonds relating to Power of attorney to receive money due upon a bond . . . . . . . . . . . . Release of bond to several obligors, bond being lost . . . . . . . . . . . . . . Salvage, bond to secure payment of . . Statutory form of bond for securing money borrowed by company by special Act: statutory form of transfer Surety bonds . . . . . . . . . . . . .

RENTCHARGES SHIPPING BUILDING COMPANIES COMPULSORY

AND ANNUITIES

SOCIETIES ACQUISITION

HIGHWAYS

AND BRIDGES AND INDEMNITIES

GUARANTEES PARTNERSHIP POWERS

LOCAL GOVERNMENT

OF ATTORNEY

RELEASES AND COMPROMISES SHIPPING

COMPANIES GUARANTEES AND INDEMNITIES

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For the substantive law see 12 Halsbury's Laws (4th Edn) paras 1385-1435 title For cases see 7 Digest (Re-Issue) title BONDS 159-247.

BONDS.

Preliminary

Note

A: NATURE AND FORM OF BONDS

1 Definition and terms. A bond is an instrument under seal- by which one person, known as 'the obligor', binds himself to pay to another person, known as 'the obligee', a specified sum of money, either immediately or at a fixed future date. It is not necessary to use a particular form of words in order to create a bond-'. An instrument which embodies no more than the obligation to pay the specified sum is known as a simple or single bond", Such bonds are practically obsolete. The term 'single' is also used to describe bonds given by a sole obligor, rather than by two or more obligors". The ordinary form of bond in use today is technically called a double or conditional bonds. It consists of two parts, the obligation and following this, the condition. A bond may contain explanatory recitals. If so, these follow the obligation and precede the condition. The obligation of a conditional bond, as in the case of a simple bond, simply binds the obligor to pay a sum of money, which may be a 'penalty' or may be 'liquidated damages'". It does not refer to the condition. The condition specifies the real object of the bond by declaring that if the obligor or some other person does or refrains from doing some specified act or acts, then, on the due performance of the condition, the bond shall be void", On breach of condition, the bond is said to have become forfeited or absolute. It does not necessarily follow that in these circumstances the obligee will be able to recover the sum of money payment of which is stipulated in the obligation 8. The intervention of equity resulted in a distinction being drawn between obligations to make payment of a sum representing either the actual loss caused by non-compliance with the condition or a genuine pre-estimate of that sum on the one hand and a penalty in excess of that on the other hand. The latter would not be recoverable". [801]
2 BL Corn (14th Edn) 340; National Telephone Co Ltd v IRC [1900] AC 1. HL; British India Steam Navigation Co v IRC (1881) 7 QBD 165 at 172, DC, per Lindley J. For the nature and use of bonds generally see 12 Halsbury's Laws (4th Edn) para 1385 et seq. Any words which show the intention of the party to bind himself will be sufficient; for such obligation is in the nature of a contract or a security for the performance of a contract which is construed according to the intention of the parties (4 Cruise Dig T 32, c 8, si). There exists power (not exercised at the date at which this volume states the law) to prescribe by rules of court the form in which and the officer to whom bonds required under or for the purpose of an order of the Court of Appeal or the High Court are to be given: the Supreme Court Act 1981 s 135 (11 Halsbury's Statutes (4th Edn) COURTS). Where bonds are accepted as security guaranteeing receivers for mental patents (see Forms 12, 13 post), such bonds must be approved by the Master of the Court of Protection: see the Court of Protection Rules 1982, SI 1982/322 r 62. As to the obligation to pay interest see 2 Halsbury's Laws (4th Edn) para 1409. 2 BL Com (4th Edn) 340; Morrant v Cough (1827) 7 B & C 206. See 'Merchant of Venice' Act I, scene 3, line 146 et seq: 'Go with me to a notary, seal me there Your single bond; and, in a merry sport, If you repay me not on such a day, In such a place, such sum or sums as are Express'd in the condition, let the forfeit Be .. .' Shep Touch 367; Co Litt 172a.

3 4

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6 See 12 Halsbury's Laws (4th Edn) paras 116, 117, 1424 and Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, HL. 7 A condition for avoidance of the obligation may be contained in a separate instrument and, if so, is often known as a defeasance. 8 See 12 Halsbury's Laws (4th Edn) para 1423 et seq. 9 See 12 Halsbury's Laws (4th Edn) para 1423. The prevalence of the equitable rules over those of the common law is now preserved by the Supreme Court Act 1981 s49(1) (11 Halsbury's Statutes (4th Edn) COURTS). [802]

2 Bonds and covenants. It is necessary that there is an obligor 1, an obligee- and a fixed sum of money in which the obligor is bound, and that the instrument is duly executed by the obligor. No consideration is necessary for the instrument is under seal". A bond is usually in the form of a deed poll+ expressing the active intention of one person or the active common intention of several persons joining together for the purpose of the making of the deed. The difference between a bond and a covenant is therefore one of form rather than of substance: a covenant is usually contained in an indenture to which two or more persons are parties and which expresses the real obligations intended to be created between them, rather than merely their active common intention. Recitals in a bond bind the obligor (but not the obligee who is not a party) by estoppel". But a recital in a deed shown to be wrong in fact and included in the deed by mistake by the party seeking to prove the true facts does not estop that party from proving and relying upon the true facts",
1 See Paragraph 1 ante and 12 Halsbury's Laws (4th Edn) para 1403. 2 See Paragraph 1 ante and 12 Halsbury's Laws (4th Edn) para 1404. 3 Squire v Whi/ton (1848) 1 HL Cas 333. 4 12 Halsbury's Laws (4th Edn) para 1303. 5 1 Wrns Saund (1871 Edn) 236 et seq; Hill v Manchester and Salford Water Works Co (1831) 2 B & Ad 544; Lainson v Tremere (1834) 1 Ad & El 792. As to their effect in restraining or explaining the terms of an ambiguous condition see Parker v Wise (1817) 6 M & S 239; Lord Arlington V Merricke (1672) 2, Saund 403, and notes thereto. 6 Greer v Kettle [1938] AC 156, [1937] 4 All ER 396, HL. [803]

B: VARIETIES OF BONDS
3 Common money bonds. Certain bonds are given solely to secure the payment of money. A common money bond is given to effect such an obligation. The condition of such a bond is usually that if the obligor pays to the obligee a smaller sum (often one-half) than that named in the obligation, with interest, on a specified day, the bond shall be void 1. [804]
1 See eg Form 1 post.

1 is one conditioned for the payment of a sum of money after the death of a specified person. Such bonds are usually given in respect of a loan and for a sum greater than that advanced. They are used in two cases: (1) where the payment depends on a contingency, such as the event of the obligor surviving a relative in respect of whom he has expeccations-'; and (2) where the payment is certain but the time of payment uncertain, as where the bond is conditioned for the payment of a certain sum on the death of the obligor".

4 Post obit bonds. A post-obit bond

1 See eg Forms 14,15,16 post. 2 See Form 14 post. 3 See Form 16 post.

[805]

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[S11]

5 Lloyd's bonds. A Lloyd's bond- is a security issued by a company either in the

form of a common money bond with a recital of the company's indebtedness to the obligee- or in the form of an acknowledgment of a debt to a particular person with a covenant to pay it '.
1 le named after its inventor: Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588 at 608 per CromptonJ. 2 See Form 19 post. 3 Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588. [S06]

6 Arbitration bonds. The agreement

between consist of mutual bonds in the form of common abide the event of the arbitrator's award",
1 See Form 11 post.

two parties to an arbitration may money bonds, with a condition to

[S07]

7 Replevin bonds. A replevin bond is a form of security which the owner of

chattels alleged to have been wrongfully distrained is required to enter into before he can obtain redelivery of the chattels. The condition of the bond is that he will institute and prosecute an action of replevin against the distrainor and make a return of the goods, if ordered to do so in the action 1.
See the County Courts Act 1984 s144 Sch1 (11 Halsbury's Statutes (4th Edn) COUNTY COURTS), CCR 1981 Ord 50 r9 and Forms 17, 18 post. As to replevin generally see 13 Halsbury's Laws (4th Edn) para 373 et seq. [SOS]

S Admiralry bail bonds. These are bonds filed by the owner of property for the arrest of which a warrant has been issued in an admiralty action in rem. By this bond the owner of arrested property may secure its release".
1 See SHIPPING.

[S09]

9 Annuity bonds. An annuity bond is a bond to secure the payment of an annuity

inter vivos",
1 See
RENTCHARGES AND ANNUfTIES.

[SI0]

c. ASSIGNMENT OF BONDS
10 Assignment at law. The obligation contained in a bond is a legal chose in action. The Law of Property Act 19251 provides that absolute assignment by writing under the hand of the assignor, not purporting to be only by way of charge, and of which notice has been given to the obligor, will as from the date of the notice transfer to the assignee the legal rights and remedies under the bond and the power to give a good discharge without the concurrence of the obligor. The assignment will, however, be subject to all equities which would have been entitled to priority over the right of the assignor '.
1 le the Law of Property Act 1925 s 136 (37 Halsbury's Statutes (4th Edn) REAL PROPERTY). 2 Graham v Johnson (1869) LR 8 Eq 36; Payne v Mortimer (1859) 4 De G & J 447; Glasse v Marshall (1845) 15 Sim 71; Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588 at 611 per Blackburn J; Re Cork and Youghal Rly Co (1869) 4 Ch App 748 at 760 per Lord Hatherley. See 12 Halsbury's Laws (4th Edn) para 1421. [S11]

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11 Assignment in equity. The benefit of the obligation may be assigned in equity by an oral agreement for valuable consideration, but subject to all equities which exist at the time notice of the assignment is given to the obligorl.
1 As to assignment of choses in action generally, see 6 Halsbury's Laws (4th Edn) para 9 et seq.

[812] 12 Estoppel of assign or . The general rule is that the assignee of a bond takes
subject to all equities and can obtain no better right than his assignor '. The obligor may, however, be estopped by his conduct from denying the validity of the bond as against an assignee for value without notice, or from setting up defences which would have been available to him as against the assignor+.
1 6 Halsbury's Laws (4th Edn) para 61 et seq. 2 Re South Essex Estuary Co ex p Charley (1870) LR 11 Eq 157; Re Hercules Insurance Co, Brunton's Claim (1874) LR 19 Eq 302; Dickson v Swansea Vale Rly Co (1868) LR 4 QB 44; Hawker v Hallewell (1856) 25 LJ Ch 558. [813-820]

Precedents

A: BONDS FOR PAYMENT OF MONEY

1
BOND FROM ONE OBLIGOR to one obligee to pay a sum of money at a stated date or on demand!
BY THIS BOND I AB (obligor) of (address) acknowledge (obligee) of (address) in the sum of 2 to be paid to CD Sealed with my seal this day of . myself bound to CD

NOW THE ABOVE-WRITTEN BOND is conditioned to be void in case the above-bounden AB his personal representatives or any person acting for and on behalf of the above-bounden AB shall [on the day of next ensuing or on demand] pay to the above-named CD or his personal representatives or assigns or his or their attorney authorised to receive the same the sum of ... with inrerest ' for the same at the rate of '" per cent per annum from the day of but in the event of the above-bounden AB or his personal representatives failing to pay the sum upon the date specified above the above-written bond shall remain in full force and effect notwithstanding no demand be made for the same by CD his personal representatives or assigns SIGNED SEALED and DELIVERED the above-named AB in the presence of . by } AB (signature and seal of obligor)

(signatures, addresses, and occupations of witnesses)

[821]
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. No particular form of words or technical expressions are necessary to constitute a bond. Any words which show the intention of the party to bind himself will be sufficient: for such obligation
is in the nature of a contract or a security for the performance of a contract which is construed

according to the intention of the parties (4 Cruise Dig T 32, c 8, si). As to the power to prescribe by rules of court the form in which and the officer to whom bonds required under or for the purposes of an order of the High Court or the Court of Appeal. see the Supreme Court Act 1981 s 135 (11 Halsbury's Statutes (4th Edn) COURTS). This power has not yet been exercised. For bonds guaranteeing receivers for mental patients, see Forms 12, 13 post. 2 The sum is usually double the amount secured. In fixing the sum mentioned in the obligation. it must be remembered that the sum so fixed is the maximum amount which can (except in very special circumstances) be recovered by action or proof on the bond, whether for principal, interest, or damages, even though the actual debt or damages may be greater: Hatton v Harris (1892] AC 547 at 565, HL: Hughes v Wynne (1832) My & K 20; Clarke v Seton (1801) 6 Ves 411; Mackworth v Thomas (1800) 5 Ves 329. 3 A common money bond with a penalty carries a right to interest as such, and not qua damages, on the sum secured until payment, although interest is not mentioned in the bond or is provided for only up to the date fixed for payment; such being the contract held to be implied by reason of the penalty: Re Dixon, Heynes v Dixon [1900] 2 Ch 561, CA. See further 12 Halsbury's Laws (4th Edn) para 1409. It is however always better to express the rate of interest agreed. Single bonds do not carry interest by force of the bond itself unless expressed: Hogan v Page (1798) 1 Bos & P 337; Re Dixon, Heynes v Dixon

[823]

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supra. But interest may now be awarded under the Supreme Court Act 1981 s35A (added by the Administration of Justice Act 1982 s 15 (1) Sch 1 Part I). [822]

2
BOND BY TWO OR MORE OBLIGORS to one or more obligees jointly
1

BY THIS BOND we AB and CD (obligors) of (addresses) acknowledge ourselves [jointly- or jointly and severally] bound [to EF (obligee) of (address) or to EF and GH (obligees) of (addresses) jointly"] in the sum of ... to be paid by us or some or one of us [to EF or to EF and GH or to their certain attorney] Sealed with our seals this day of . NOW THE ABOVE-WRITTEN BOND IS conditioned to be void in case the above-bounden AB and CD or any or one of them or their or his personal representatives or any person acting for and on behalf of them or any or one of them shall pay [on the day of next ensuing or on demand] [to EF or to EF and GH or the survivors or survivor of them or the personal representatives of such survivor or their or his assigns] the sum of with interest for the same as from the . day of at the rate of per cent per annum but in the event of the abovebounden AB and CD or their personal representatives failing to pay the sum upon the date specified above the above-written bond shall remain in full force and effect notwithstanding no demand be made by or on behalf of [EF or EF and GH] [his or their] personal representatives or assigns SIGNED etc AB, CD (signatures and seals of obligors)
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1,3 ante. The sum mentioned in the obligation is usually double the amount secured: see Form 1 note 2 ante. 2 Having regard to the present rules (RSC Ord 15, r 4) which enable claims against two or three or more joint and several obligors to be enforced against them without making the other obligors defendants, it is no longer necessary as it formerly was (see 1 Wrns. Saunders (1871 Edn) 475), where the obligors are more than two, to make them bind 'themselves and every two of them,' or 'themselves and every two or three of them,' ete. 3 A bond cannot be given to two or more obligees jointly and severally: Bradburne v Botjield (1845) 14 M&W559. Where the benefit of a bond given to secure money lent is intended to enure to the obligees as joint tenants, it is expedient to express this, having regard to the equitable presumption that where two or more persons lend money to a third and take a security for it in their names, they are prima facie to be deemed tenants in common both of the debt and the security, unless the contrary appears: see Steeds v Steeds (1889) 22 QBD 537; Powell v Brodhurst [1901] 2 Ch 160. Cf the Law of Property Act 1925 ss81, 111 (37 Halsbury's Statutes (4th Edn) REAL PROPERTY) as to the effect of obligations to two or more jointly. Where the obligees are intended to be interested as tenants in common, the words 'as tenants in common' should be substituted for 'jointly.' [823]

3
BOND BY SEVERAL OBLIGORS with common penalty but conditioned on the payment of separate sums!
BY THIS BOND we AB and CD (obligors) of (addresses) acknowledge ourselves jointly and severally bound [to EF (obligee) of (address) or to EF and GH (ohligees) of (addresses)] jointly in the sum of ...to be paid by us [to EF or EF and GH] Sealed with our seals this day of .

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[825]

NOW THE ABOVE-WRITTEN BOND is conditioned to be void in so far as the above-named AB (first named obligor) is concerned in case the above-named AB or his personal representatives or any person acting on his or their behalf shall pay on the day of next ensuing [to EF his personal representatives or assigns or to EF and GH or the survivor of them or the personal representatives of such survivor their or his assigns] the sum of with interest for the same from the day of ... '" to the day of at the rate of per cent per annum. And in so far as the above-named CD (second named obligor) is concerned the above-written obligation is conditioned to be void in case the above-named CD or his personal representatives or any person acting on his or their behalf shall pay on the day of next ensuing to [EF his personal representatives or assigns or EF and GH or the survivor of them or the personal representatives of such survivor their or his assigns] the sum of with interest for the same from the day of to the day of at the rate of per cent per annum. But the payment by either one [or more] of the above-named AB and CD of the sum or sums herein mentioned shall in no way be taken or accepted to be a release or operate as a release by [EF or EF and GH] [his or their] personal representatives or assigns of any other party to the above-written obligation save the party paying the above-mentioned sum or sums SIGNED etc AB, CD (signatures and seals of obligors)
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1, 3 ante. As to the fixing of the amount of the obligation, see Form 1 note 2 ante. Even in the absence of express words of severance, it seems that a bond by two or more obligors will be construed as a several bond where (as is contemplated in this form) each obligor binds himself for a distinct sum: see Collins v Prosser (1823) 1 B & C 682: and 12 Halsbury's Laws (4th Edn) para 1408. [824]

4
BOND BY ONE OBLIGOR to one obligee for payment ofa sum by equal instalments with interest, the agreement being recited!
BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of . Sealed with my seal this WHEREAS day of . AB being indebted to CD in the sum of [1,000] for (state nature of consideration) has requested CD to give him time for the payment of that sum which CD has consented to do upon the terms that payment of the sum with interest in manner hereinafter expressed should be secured by the above-written obligation conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION AB or his personal representatives shall on the of in every year commencing with the CD his personal representatives or assigns the sum on the sum of [1,000] or such part of it as shall ... per cent per annum until the whole of the sum fully paid SIGNED etc AB (signature and seal of obligor)
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to the fixing of the amount of the obligation, see Form 1 footnote 2. [825]

is conditioned to be void in case day of and the day day of [next] pay to of [100] together with interest not have been paid at the rate of of [1,000] with interest shall be

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5
BOND BY ONE OBLIGOR to one obligee for payment of a sum by unequal instalments with interest, without recitals!
BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of [2,000] Sealed with my seal this day of .

NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case AB or his personal representatives shall pay to CD his personal representatives or assigns the sum of [1,000] now owing from AB as he hereby admits to CD with interest thereon from the day of at the rate of per cent per annum in manner following namely the sum of [300] together with interest on the sum of [1,000] from the date last mentioned on the day of and the sum of [250] together with interest on the sum of [700] from the date last mentioned on the day of and the sum of [450] together with interest thereon from the date last mentioned on the day of . SIGNED etc AB (signature and seal of obligor)
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to the fixing of the amount of the obligation, see Form 1 note 2 ante. [826]

6
BOND BY A DEBTOR for payment of a debt by instalments, the balance of the debt becoming immediately payable on default in payment of any instalmentBY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the pa ymen t to him of the sum of . Sealed with my seal this day of .

WHEREAS (1) AB is indebted to CD in the sum of ...as AB hereby acknowledges (2) At the request of AB, CD has agreed to take payment of the debt [with interest] by the instalments and at the times hereinafter mentioned on the terms that the payment of the instalments [and interest] at the respective times and in case of any default then the immediate payment of the sum of ... (the debt) or the unpaid part of it [with interest] should be secured by the above-mentioned obligation conditioned as is hereinafter mentioned NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the cases following, namely: 1 In case AB or his personal representatives shall on the day of and ...... day of in every year commencing with the day of next [or within days after each such respective day] pay to CD his personal representatives or assigns the sum of ... (half-yearly instalment) [together with interest on the said sum of ... (the debt) or such part of it as shall not have been paid at the rate of ... per cent per annum] until the whole of the sum of ... (the debt) with interest shall be fully paid 2 In case any of the half-yearly payments of principal [or interest] shall from any cause whatever not be paid upon the days hereinbefore mentioned for such respec-

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[828]

tive payment [or within days thereafter] AB or his personal representatives shall [forthwith or upon demand] pay to CD his personal representatives or assigns the whole balance then remaining unpaid of the sum of ... (the debt) [with interest'[-' SIGNED etc AB (signature and seal of obligor)
1 No stamp duty. For the defmition and terms of a bond and for common money bonds, sec Paragraphs 1 and 3 ante. 2 A condition of this kind whereby the balance of the principal debt is made payable immediately on default in payment of any instalment or interest is not itself in the nature of a penalty and will not be relieved against as such: see Protector Endowment Loan and Annuity Co v Griee (1880) 5 QBD 592, CA; Thompson v Hudson (1869) LR 4 HL 1. [827]

7
BOND BY A PARENT to pay a surn to trustees of marrjage sertlernent as porrion '

BY THIS BOND I AB (parent) of (address) bind myself to CD and EF (trustees) of (addresses) for the payment to them of the sum of ... (a sum double the amount of the

portion)
Sealed with my seal this day of . WHEREAS a marriage is intended shortly to be solemnised between PQ (intended spouse) of (address) and RS (child of the above-bounden AB) and upon the treaty for the marriage it was agreed that AB should within [months or years] after the marriage pay to the above mentioned CD and EF the sum of ... with interest thereon from the date of the marriage until payment of the sum at the rate of ... per cent per annum to be held and applied by CD and EF upon and for the trusts and purposes and with and subject to the powers and provisions declared and contained of and concerning the same in a certain deed already prepared and engrossed intended to bear even date with the above-written obligation and expressed to be made between ... (parties) NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the following cases namely: 1 In case the intended marriage shall not be solemnised within [six] months after the date of the above-written obligation 2 If within [months or years] after the solemnisation of the intended marriage AB or his personal representatives shall pay to CD and EF or the trustees or trustee for the time being of the settlement the sum of ... (the portion) [with interest there on from the date of such solemnisation down to the date of payment at the rate of ... per cent per annum] SIGNED etc AB (signature and seal of parent)
No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to marriage settlements generally see SETTLEMENTS. See also 42 Halsbury's Laws (4th Edn) 603. [828]

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8
BOND BY A CHILD for the payment ofa sum of money lent by parent and conditioned to be paid on the death of the parent+
BY THIS BOND I AB (child) of (address) acknowledge myself bound to CD (parent) of (address) in the sum of ... to be paid on the death of CD to CD's personal representatives or assigns Sealed with my seal this day of .

WHEREAS (1) The above-bounden AB is indebted to the above-named CD in the sum of ... advanced by CD to AB at [his or her] request (2) It has been agreed between the parties that the repayment of the sum of ... together with interest thereon at the rate of per cent per annum from the date of the death of CD until payment shall be deferred until months after the death of CD. NOW at the to the at the THE ABOVE-WRITTEN BOND is conditioned to be void in case AB shall expiration of months next after the death of CD payor cause to be paid personal representatives or assigns of CD the principal sum of ... with interest rate of ... per cent per annum from the date of the death of CD AB (signature and seal of child)

SIGNED etc

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. This form may be useful in cases where a parent has advanced to a child all the amounts which the child would have under the parent's will and which by the will would be brought into hotchpot. The sum thus secured would then enure for the benefit of the parent's estate, including the creditors. [829]

9
BOND IN A SUM fixed as liquidated damages to preserve a trade secretBY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of ... as agreed and liquidated damages and not as a penalty? Sealed with my seal this day of .

WHEREAS CD has imparted to AB (specify trade secret) upon an express agreement that AB should enter into the above-written obligation for the payment to CD of the sum of ... as liquidated damages and not as a penalty but conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be AB shall at all times hereafter well and truly keep the secret and shall not same or suffer or permit the same to be disclosed to any person or persons whether in the employment of AB or not without the licence in writing had and obtained SIGNED etc AB (signature and seal of obligor) void in case disclose the whatsoever of CD first

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. 2 As to the distinction between liquidated damages and penalties, see 12 Halsbury's Laws (4th Edn) para 1116 et seq; para 1424. [830]

351

VOL4:BONDS

[831]

10
BOND TO SECURE PAYMENT of a rnonthly ' sum for the grantor's or beneficiary's Hfel
BY THIS BOND I AB (grantor) of (address) acknowledge (beneficiary) of (address) for the payment to him of ...2 Sealed with my seal this day of . myself bound to CD

THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case AB [or his personal representatives] shall pay to CD his personal representatives- and assigns during the life of [AB or CD] a monthly sum of ... to be paid on the first day of each month and commencing on the first day of next SIGNED etc AB (signature and seal of grantor)

No stamp duty. For the definition and terms of a bond and for common money bonds. see Paragraphs 1 and 3 ante. As to the taxation consequences of revocable settlements allowing release of obligations, see the Income and Corporation Taxes Act 1970 s 445 (42-44 Halsbury's Statutes (4th Edn) TAXATION) and 23 Halsbury's Laws (4th Edn) para 1442 et seq. 2 This will usually be double the sum necessary to purchase a like monthly sum. 3 If the term of the annuity is the beneficiary's life, the reference to his personal representatives should be omitted. Even if the term is the grantor's life, the reference appears strictly not to be necessary: see Reid v Coggans (or Reid) [1944] AC 91, [1944]1 All ER 134, HL. [831]

11
BOND OF SUBMISSION to arbitration without recitals where all matters in difference are referred 1
BY THIS BOND I AB (obligor) of (address) bind myself to CD (other party to bond) of (address) for the payment to him of the sum of ... Sealed with my seal this ... day of ... THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case the above-bounden AB his executors and administrators shall in all respects observe the award of EF (arbitrator) of (address) appointed by the above-bounden AB and CD to determine all matters in difference between them on the terms that EF shall make and publish his award in writing, and signed by him, of and concerning the matters referred, ready to be delivered to them or to either of them or if they or either of them shall be dead before the making of the award to their respective personal representatives who shall require the same on or before the ... day of ... next or on or before any other day to which EF shall by any writing signed by him, indorsed on this bond, from time to time enlarge the time for making his award And it is further agreed that the costs of preparing and executing this bond and a duplicate of it2 and the costs of the reference and award shall be in the discretion of EF who may direct to and by whom and in what manner the same or any part of it shall be paid SIGNED etc AB (signature and seal of obligor)

[832]

VOL4:BONDS

352

1 No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to arbitration generally, see ARBITRATION. 2 A bond in this form should be executed by each of the parties. [832]

12
BOND TO GUARANTEE MENTAL PATIENT'S RECEIVER-guarantee company!
COURT OF PROTECTION ...... 19 ... No ....

In the Matter of AB (full name of patient) KNOW ALL MEN BY THESE PRESENTS THAT WE CD of (address and description or occupation) ('the Receiver'), and the ST Guarantee Company Limited whose registered office is situate at (address), ('the Sureties') are bound and firmly obliged to OUR SOVEREIGN LADY ELIZABETH THE SECOND by the Grace of God of the United Kingdom of Great Britain and Northern Ireland and of her other Realms and Territorories Queen, Head of the Commonwealth, Defender of the Faith in the sum of pounds of good and lawful money of Great Britain (subject to reduction as hereinafter provided) to be paid to the same Lady the Queen her heirs or successors to which payment well and truly to be made I the Receiver for myself my heirs executors and administrators and WE the Sureties for ourselves and our successors do bind ourselves jointly and severally by these presents. SEALED with the Seal of the Receiver and also with the Common Seal of the Sureties this day of One thousand nine hundred and . THE CONDITION of the above written obligation is such that WHEREAS the Receiver has been appointed Receiver in the matter of the above-named AB ('the Patient') AND WHEREAS the Master of the Court of Protection has approved the Sureties as Sureties for the due performance of the duties of the Receiver as appears by the Seal of the Court impressed in the margin hereof. IF THEREFORE the Receiver shall duly account for the rents issues and profits of the Real Estate of the Patient and also for his Personal Estate and the profits thereof which shall come to his possession and shall observe and perform every Order and direction of the Court concerning the Patient or his estate and concerning all such money as shall be found due upon the taking and passing of the accounts delivered to the Court and shall be careful to see the houses and buildings of the Patient to be well and sufficiently repaired and so kept and maintained and shall carefully preserve and keep all the Deeds evidences and writings in the possession of the Receiver touching the Estate of the Patient and shall in all things demean himself as a careful and faithful Receiver of the Estate of the Patient that then the obligation to be void or else the same to stand remain and be in full force and virtue PROVIDED ALWAYS that the Court may by indorsement on these Presents testified by the Seal of the Court reduce the sum of pounds to such reduced sum as may be necessary and upon such indorsement these Presents shall as from the date thereof continue to be in full force and virtue as if such reduced sum had originally been contained in these Presents instead of the sum of pounds PROVIDED AL WAYS that a Certificate under the Seal of the Court that this Bond has become forfeit in the sum stated in such Certificate shall be sufficient and conclusive evidence against the Receiver and the Sureties of the truth of the contents of such Certificate and that this Bond has become forfeited to the amount of the sum so stated and that such sum

353

VOL4:BONDS

[834]

forms a valid and binding claim not only against the Receiver but also against the Sureties PROVIDED AL WAYS AND IT IS FURTHER AGREED between the Receiver and the Sureties that the Receiver on being discharged from his office shall forthwith give notice in writing thereof to the Sureties. [833] PROVIDED AL WAYS that if the Receiver shall not pay to the Sureties the annual premium upon this Bond within 15 days of the due date thereof the Sureties may apply to the Court to be relieved from further liability as such Sureties as aforesaid. SIGNED SEALED AND DELIVERED by the Receiver in the presence of (name, address and description of witness) THE SEAL OF THE SURETIES was hereunto affixed in the presence of (name and description of witnesses) '} (receiver's signature)

I
j~
(seal of guarantee company)

I HEREBY CERTIFY that this Bond has been duly executed by the Sureties in accordance with the regulations now governing the execution by the Sureties of such Bonds. (signature) Accident Manager or other responsible official of the Sureties duly authorised in that behalf
DATED

,19

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to the requirements for such a bond, see the Court of Protection Rules 1982 1982/322 r62. See further 30 Halsbury's Laws (4th Edn) para 1269; 26 Court Forms (2nd edn) (1985 Issue) 79 et seq. [834]

13
BOND TO GUARANTEE MENTAL PATIENT'S RECEIVER-personal
sureties" (Heading as in Form 12 ante)

KNOW ALL MEN BY THESE PRESENTS THAT WE CD of (address and description or occupation) ('the Receiver') and JK of (address and description or occupation) and KL of (address and description or occupation) (,the Sureties'), are bound and firmly obliged to OUR SOVEREIGN LADY ELIZABETH THE SECOND by the Grace of God of the United Kingdom of Great Britain and Northern Ireland and of her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith in the sum of pounds of good and lawful money of Great Britain to be paid to the same Lady the Queen her heirs or successors to which payment well and truly to be made the Receiver and the Sureties bind ourselves jointly and severally and our respective heirs executors and administrators by these presents. SEALED with our Seals this day of One thousand nine hundred and THE CONDITION (continue as in Form 12 ante). IF THEREFORE (continue as in Form 12 ante) then the Obligation to be void or else the same to stand remain and be in full force and virtue PROVIDED AL WAYS that a Certificate under the Seal of the Court that this Bond has become forfeit in the sum stated in such Certificate shall be sufficient and conclusive evidence against the

[836]

VOL4:BONDS

354

Receiver and the Sureties of the truth of the contents of such Certificate and that this Bond has beome forfeited to the amount of the sum so stated and that such sums forms a valid and binding claim not only against the Receiver but also against the Sureties PROVIDED ALWAYS AND IT IS FURTHER AGREED between the Receiver and the Sureties that the Receiver on being discharged from his office shall forthwith give notice in writing thereof to the Sureties. SIGNED SEALED AND DELIVERED by the Receiver in the presence of (name, address and description of witness) SIGNED SEALED AND DELIVERED by the above-named JK in the presence of (name, address and description of witness) SIGNED SEALED AND DELIVERED by the above-named KL in the presence of (name, address and description of witness)
See Form 12 note 1 ante.

} (receiver's signature and seal)

} }

(surety's signature and seal)

(surety's signature and seal)

[835]

B: POST OBIT BONDS

14
POST OBIT BOND for payment ofa sum of money in case the obligor survives a relative from whom the obligor has expectarions! BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for payment to him of the sum of [1 ,000] Sealed with my seal this day of. . WHEREAS CD has at the request of AB advanced to him the sum of [300] the receipt of which AB hereby admits upon an express agreement that in case AB should die before EF (relative) of (address) CD should not have or make any right or claim against AB his estate or effects to repayment of the last-mentioned sum of [300] or any part of it or otherwise in respect of the advance but that in case AB should survive EF and AB should within ... [months or weeks or days] after the death ofEF repay to CD the sum of [300] and also pay the further sum of [700] being the agreed consideration for the advance and for the risk taken by CD which two lastmentioned sums make together the sum of [1,000] and also that AB should execute the above-written obligation conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the casesfollowing namely: 1 In caseAB shall die before EF 2 In case AB shall survive EF and he or his personal representatives shall within [months or weeks or days] after the death of EF pay to CD his personal representatives or assignsthe sum of[1,000] SIGNED etc AB (signature and seal of obligor)
No stamp duty. For the definition and terms of a bond and for post obit bonds, see Paragraphs 1 and 4 ante. Bargains with expectant heirs and reversioners may be set aside by courts of equity if the bargains are inequitable and unconscionable, and the onus is on the person dealing with the heir or reversioner to prove that the bargain is a just one: see 18 Halsbury's Laws (4th edn) para 345.

[836]

355

VOL4:BONDS

[837]

15
POST OBIT BOND, the transaction being described as a sale and purchase of the sum secured 1
BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of [1 ,000] Sealed with my seal this ... day of ... WHEREAS (1) CD has agreed with AB for the purchase from AB of the sum of [1,000] to be paid to CD in the event ofEF (obligor's relative or other person upon whose death the obligor has expectations) of (address) dying before AB but not otherwise at the price of [300] (2) In pursuance of the agreement CD has paid to AB the sum of [300] the receipt of which is hereby acknowledged (3) Upon the treaty for the purchase of the contingent sum of[l,OOO] it was agreed that payment of it should be secured by the above-written obligation conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the cases following namely: (set out the cases stated in Form 14 ante) SIGNED etc AB (signature and seal of obligor)

No stamp duty. For the definition and terms of a bond and for post obit bonds, see Paragraphs 1 and 4 ante. This form is sometimes preferred for a post obit security, but there is nothing really gained by describing the transaction as a 'purchase' of a contingent future sum. There cannot be a real purchase of such a thing as distinct from a contract to pay the sum in the event specified; and, in any case, the bond will be impeachable on the same grounds as if it were in Form 14 ante. [837]

16
POST OBIT BOND for payment of a sum of money upon the death of the obligor, the time for payment only being contingent!
BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for payment to him of the sum of[l,OOO] Sealed with my seal this ... day of ... WHEREAS CD has at the request of AB advanced to him the sum of [600] as AB hereby admits upon the terms that during the life of AB, CD shall not have or make any right or claim against AB in respect of the sum or any part of it but that upon the death of CD the personal representatives of AB shall pay to AB the sum of [1,000] being the sum of [600] together with the sum of [400] the agreed consideration for making the advance and for deferring the repayment of it as described above and that AB should execute the above-written obligation conditioned as is hereafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case the personal representatives of AB shall within ... [months or weeks or days] after the death of AB pay to (obligee) his personal representatives or assigns the sum of [1,000] SIGNED etc AB (signature and seal of obligor)

[839]

VOL4:BONDS

356

No stamp duty. For the definition and terms of a bond and for post obit bonds. see Paragraphs 1 and 4 ante; cf Forms 14. 15 ante. [838]

c.

BONDS OTHER THAN MONEY BONDS

17

BOND IN REPLEVIN where action to be begun in High Court?

KNOW ALL MEN BY THESE PRESENTS, that we, AB of (address), LM of (address) and NO of (address), are jointly and severally held and firmly bound to CD of (address) in the sum of ... to be paid to CD or his certain attorney, executors, administrators, or assigns; for which payment to be well and truly made we bind ourselves and each and every of us, in the whole, our and each of our heirs, executors, and administrators, jointly and severally, firmly by these presents. Sealed with our seals, and dated this and . day of one thousand nine hundred

WHEREAS [the above-named LM and NO at the request of AB have agreed to enter into the above-written obligation, and his security has been approved of by .................. , the registrar of the County Court, as appears by his allowance in the margin hereof;] Now the condition of this obligation is such, that if the above-bounden [AB do and shall within one week from the date of the obligation begin an action of replevin against the above-named CD in the High Court of Justice, for taking and unjustly detaining certain goods and chattels of AB, namely (describe the goods and chattels), and prosecute such action with effect and without delay, and unless judgment be obtained thereon by default, do and shall prove before the Court that he CD had good ground for believing that [the title to the hereditament in respect of which the distress was made was in question or that the title to a [toll or market or fair or franchise] was in question or that the alleged rent or damage in respect of which the distress was made exceeded 20], and do and shall also make return of the goods and chattels, if return of them shall be adjudged], then this obligation shall be void and of none effect, otherwise the same shall be and remain in full force and virtue. SIGNED SEALED and DELIVERED the above-bounden AB, LM, NO in the presence of . by

AB, LM, NO

(signatures and seals oJ all parties)

(signature, address and occupation oJ witness)

No stamp duty. For the definition and terms of a bond and for replevin bonds. see Paragraphs 1 and 7 ante. For replevin generally, see 13 Halsbury's Laws (4th Edn) paras 373 et seq. As to the requirement that security must be given in replevin, see the County Courts Act 1984 s 144 Sch 1 (11 Halsbury's Statutes (4th Edn) COUNTY COURTS) and 13 Halsbury's Laws (4th Edn) para 377. See 15 Court Forms (2nd Edn) (1983 Issue) 181. [839]

18
BOND IN REP LEVIN where action to be commenced in county court!
KNOW ALL MEN BY THESE PRESENTS

(continue as in Form 17 ante)

Sealed (continue as in Form 17 ante) WHEREAS

(continue as in Form 17 ante)

357

VOL4: BONDS

[841]

Now the condition of this obligation is such, that if the above-bounden AB do and shall within one month from the date of the obligation commence an action of replevin against the above-named CD in the County Court for taking and unjustly detaining of certain goods and chattels of AB namely (describe the goods and chattels), and prosecute such action with effect and without delay, and do and shall also make return of the goods and chattels, if return of them shall be adjudged, then this obligation shall be void and of no effect, otherwise the same shall be and remain in full force. (Conclude as in Form 17 ante)
1 No stamp duty. See Form 17 footnote 1 ante.

[840]

19
LLOYD'S BOND given by a company! (name of company) No .... Bond for

...

BY THIS BOND XY plc" (the company) binds itself to AB (obligee) of (address) for the payment to him of the sum of ... Sealed with the common seal of the company this ... day of .... WHEREAS the company is indebted to AB in the sum of ... for (state the consideration eg work done for the company or goods sold and delivered to the company, or as the case may be). NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case the company shall on the ... day of ... pay to AB his personal representatives or assigns the sum of [with interest thereon at the rate of ... per cent per annum from the day of ]. THE COMMON SEAL ofXY plc was affixed in the presence of Director Secretary
No stamp duty. For the definition and terms of a bond and for Lloyd's bonds, see Paragraphs 1 and 5 ante. As to Lloyd's bonds generally, see 12 Halsbury's Laws (4th Edn) para 1394. The instrument (called after the late Mr JH Lloyd, who introduced it into common use) was devised for the use of companies with limited and exhausted borrowing powers. Though at one time much used, especially by railway companies, for the purpose of raising money for the use of the company, there can be no doubt that when issued for that purpose in excess of the authorised powers, they were and are ultra vires and legally void, as, in the case of railway companies, was expressly declared by the Railway Regulation Act 1844 s 19 (repealed). But when given in consideration of a debt bona fide due by the company at the time for goods supplied, work done, or other valid consideration other than money lent, there is no reason to doubt their validity: Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588; Re Cork and Youghal Rly Co (1869) 4 Ch App 748, CA). The common form of a so-called 'Lloyd's bond' is not a bond but an acknowledgment of the debt of the company and a covenant to pay it at a specified date, with interest: see Chambers v Manchester and Milford Rly Co supra. 2 Under the Companies Act 1985 s25 (1) (8 Halsbury's Statutes (4th Edn) COMPANIES) the name of a public company must end with the words 'public limited company' or their equivalent in Welsh.

(common seal of the company)

[841]

[842]

VOL4:BONDS

358

20
BOND TO SECURE THE PERFORMANCE of an agreement, without recitals 1
BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of ... Sealed with my seal this ... day of ... NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case the above-bounden AB or his personal representatives shall henceforth at all times perform and observe the stipulations provisions and conditions on his and their part to be performed and observed and contained in an agreement dated ... and made between (parties)2 SIGNED etc AB (signature and seal of obligor)

1 No stamp duty. For the definition and terms of a bond, see Paragraph 1 ante.
2 Where contractors defaulted and an action against the guarantors on a bond guaranteeing performance

of the contract was dismissed, a new action against the guarantors on the ground of delay was also dismissed on the plea of res judicata; see Workington Harbour and Dock Board v Trade Indemnity Co Ltd (No 2) [1938]2 All ER 101, HL. [842]

21
BOND GIVEN BY CONTRACTOR to local authority guaranteeing fulfilment of contractual obligations!
BY THIS BOND AB plc (obligor company) ('the Contractor') having its registered office at (address) and CD plc (guaranteeing company) (,the Surety') having its registered office at (address) are bound to the XY County Council (local authority) (,the Council') in the sum of ... for the payment of which sum to the Council the Contractor and the Surety bind themselves jointly and severally by this bond Sealed with our seals this day of .

WHEREAS by an agreement dated the day of ... and made between (1) the Contractor and (2) the Council the Contractor contracted with the Council to execute and perform the works therein mentioned in the manner and by the time therein specified and subject to such terms provisions and stipulations as in the agreement are particularly set forth NOW THE CONDITION of the above-written bond is such that if the Contractor or its successors or assigns shall well and truly perform fulfil and keep all and every the covenants clauses provisos terms and stipulations in the agreement mentioned or contained and on the part of the Contractor to be observed performed fulfilled and kept according to the true purport intent and meaning of it or if on failure by the Contractor so to do the Surety shall satisfy and discharge the liquidated damages sustained by the Council up to the amount of the above-written bond then the above-written bond shall be void but otherwise it shall be and remain in full force and the giving by the Council of any extension of time for the performing of the agreement or anything therein mentioned or contained and on the part of the Contractor to be performed or fulfilled or any other forgiveness or forbearance on the part of the Council to the Contractor or its successors or assigns shall not in any way release the Surety from the Surety's liability under the above-written bond [Provided always that this bond is executed by the Surety upon the following express

359

VOL4:BONDS

[844]

condition which shall be a condition precedent to the right of the Council to recover against the Surety under the above-written bond: If any failure by the Contractor well and truly to fulfil perform or keep any of the covenants clauses provisos terms and stipulations in the agreement mentioned or contained shall become known to the Council and the failure is such as may involve the Surety in liability under the above-written bond the Council shall within ... days after such failure has become known to the Council by letter sent by registered post or recorded delivery service notify the Surety of the failure and shall so far as may be lawful permit the Surety to make the failure good] THE COMMON SEAL etc

(common seals of contractor and surety)

No stamp duty. For the definition and terms of a bond, see Paragraph 1 ante. Local authorities employing a contractor to carry out extensive work commonly protect themselves against loss arising through the contractor being unable to complete the work by inserting a clause in the agreement with him requiring him, together with sureties, to enter into a bond as security for the due performance of the work. Any bond for the completion of contractual obligations is usually for a sum representing a percentage of the contract price, such as 5 per cent. 10 per cent, 15 per cent, and in former times often more. Sureties are commonly insurance companies, finance companies or banks. The premium charged is calculated at a rate per cent of the total contract price, depending on the circumstances of the case. For a contractors' bond providing security in connection with street works under the advance payments code contained in the Highways Act 1980 Pt XI (ss203-237) (20 Halsbury's Statutes (4th Edn) HIGHWAYS) see title HIGHWAYS AND BRIDGES. [843]

22
BOND FOR PERCENT AGE of contract price conditioned to remain in force only until further bond is executedBY THIS BOND we Brown & Sons plc (obligor company) ('the Contractor') having its registered office at (address) and Green Bros plc (guarantor company) (,the Surety') having its registered office at .. , are held and firmly bound unto John Smith (employer) ('the Employer') in the sum of ... for the payment of which sum the Contractor and the Surety bind themselves their successors and assigns jointly and severally by these presents [844] Sealed with our seals this day of .

WHEREAS (1) The Contractor by an agreement dated the ... day of .. , made between (1) the Employer and (2) the Contractor entered into a contract ('the Contract') for the construction completion and maintenance of houses and ., garages and works in connection therewith at ('the Works') as therein mentioned in conformity with the provisions of the Contract (2) It is intended that these presents shall be construed as one with the Contract NOW THE CONDITION of the above-written bond is such that if the Contractor shall duly perform and observe all the terms provisions conditions and stipulations of the Contract on the Contractor's part to be performed and observed according to the true purport intent and meaning of it or if on default by the Contractor the Surety shall satisfy and discharge the damages sustained by the Employer thereby up to the amount of the above-written bond or if at any time after AB ('the Architect') shall have issued a certificate stating that the total value of the work executed under the Contract is not less than [half] of the contract sum and the Contractor and the Surety shall have executed a new bond in the value of [five per cent] of the contract sum conditioned for the due performance and observance of all the terms provisions conditions and stipulations of the Contract on the Contractor's part to be performed

[845]

VOL4:BONDS

360

and observed during the execution of the remainder of the Works until the practical completion of them or on default by the Contractor for the satisfaction and discharge of the damages sustained by the Employer thereby up to the amount of the new bond then this obligation shall be null and void but otherwise shall be and remain in full force and effect but no alteration in the terms of the Contract made by agreement between the Employer and the Contractor or in the extent or nature of the Works to be constructed and completed thereunder and no allowance of time by the Employer or the Architect under the Contract nor any forbearance or forgiveness in or in respect of any matter or thing concerning the Contract on the part of the Employer or AB shall in any way release the Surety from any liability under the above-written bond THE COMMON SEAL etc

(common seals of contractor and surety)

1 No stamp duty. For the definition and terms of a bond, see Paragraph 1 ante. The bond may be eg for 10 per cent or 15 per cent of the contract price. For a form of further bond, see Form 23 post.

[845]

23
BOND FOR REDUCED PERCENTAGE of contract price following previous bond and part execution of works '
BY THIS BOND we (obligor company) (,the Contractor') at (address) and (guarantor company) (,the Surety') having its are held and firmly bound unto (council) ('the Employer') payment of which sum the Contractor and the Surety bind and assigns jointly and severally by these presents Sealed with our seals this ... day of ... WHEREAS (1) The Contractor by an agreement dated the ... day of ... made between the Employer and the Contractor has entered into a contract ('the Contract') for the construction completion and maintenance of ... houses and ... garages and works in connection therewith at ... (,the Works') as therein mentioned in conformity with the provisions of the Contract which Contract has been in part performed (2) It is intended that these presents shall be construed as one with the Contract NOW THE CONDITION of the above-written bond is such that if the Contractor shall duly perform and observe all the terms provisions conditions and stipulations of the Contract on the Contractor's part remaining to be performed and observed according to the true purport intent and meaning of it or if on default by the Contractor the Surety shall satisfy and discharge the damages sustained by the Employer thereby up to the amount of the above-written bond then this obligation shall be null and void but otherwise shall be and remain in full force and effect until the date of practical completion of the whole of the works as certified by AB ('the Architect') under the contract but no alteration in terms of the Contract made by agreement between the Employer and the Contractor or in the extent or nature of the works to be constructed and completed thereunder and no allowance of time by the Employer or the Architect under the Contract nor any forbearance or forgiveness in or in respect of any matter or thing concerning the Contract on the part of the Employer or the Architect shall III any way release the Surety from any liability under the above-written bond. THE COMMON SEAL etc having its registered office registered office at (address) in the sum of ... for the themselves their successors

(common seals of contractor and surety)

361

VOL4:BONDS

[847]

The bond should be for a lesser percentage (eg 5 per cent) than the previous bond: see Form 22 ante.

[846]

24
BOND BY AN AGENT to account and pay over money received! BY THIS BOND I AB (agent) of (address) acknowledge myself bound to CD (principal) of (address) for the payment to him of the sum of ... as agreed and liquidated damages and not as a penalty Sealed with my seal this ... day of ... WHEREAS by an agreement in writing dated the ... day of .'. and made between (1) AB and (2) CD AB agreed to collect the rents of (particulars of property) and to act as agent" for CD [at ... in the county of ... ] in the manner specified in the agreement and to perform and observe the several stipulations set out in the agreement NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void if AB shall from time to time and at all times hereafter during the continuance of the agreement or so long as AB shall continue to act in the capacity of rent collector and agent as aforesaid honestly and diligently execute and perform the duties of rent collector and agent as aforesaid and shall deliver in writing to CD his personal representatives or assigns from time to time [on demand or on ... next and on each ensuing ... day of ... in each year following or within ... days after each of the usual quarter days] a just and true account of all money securities goods and effects whatsoever which shall come to his hands and shall at the same time duly pay over and deliver to CD his personal representatives or assigns all such money securities goods and effectsof whatsoever description SIGNED etc AB (signature and seal of obligor)

1 No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. Notwithstanding the form of these words the sum might be deemed to be a penalty; see 12 Halsbury's Laws (4th edn) para 1116 et seq; para 1424. 2 Care should be taken in the agreement or the bond to define as clearly as possible the authority of the agent, or the principal may be held liable for unauthorised acts of the agent and particularly for a rent collector or agent pledging the credit of his principal for repairs. [847]

25
BOND BY AN EMPLOYEE not to engage in business in competition with employer 1 BY THIS BOND I AB (employee) of (address) bind myself to CD (employer) (address) for the payment to him of the sum of [1 ,000] Sealed with my seal this ... day of ... WHEREAS CD carries on business as (nature of the business) at (place or places) and [has agreed to take AB into his employment or has agreed to continue to employ AB2] in connection with the business in the capacity of (nature of the employment) upon an express agreement" that AB shall not while in the employment of CD [or of his successorsin business] whether in the capacity in which he is now employed or in any other capacity or during the period of ... [years or months] next after he shall whether by reason of dismissalretirement or otherwise have ceased to be so employed directly or indirectly and whether as principal agent director of a company traveller of

[848]

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employee or otherwise carry on or be engaged or concerned or take part in the business of within miles of except on behalf or with the consent in writing of CD [or his successorsin business] and also that in the event of his failing to observe or perform the agreement he shall pay to CD [or his successorsin business] or other the person or persons for the time being entitled to the benefit of the agreement the sum of [1,000] as and for liquidated damages. And also that he shall execute the above-written obligation conditioned as in hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the casesfollowing that is to say: 1 In case AB shall not while in the employment of CD [or of his successors in business] whether in his present or any other capacity or during the period of ... [years or months] after he shall whether by reason of dismissal retirement or otherwise have ceased to be so employed directly or indirectly and whether as principal agent director of a company traveller servant or otherwise carry on or be engaged or concerned or take part in the business of ... within '" miles of ... except on behalf or with the consent in writing of CD [or his successorsin business] 2 In case AB shall fail to perform or observe the agreement and shall in that event [forthwith or upon demand] pay to CD [or his successorsin business] or other the person or persons for the time being entitled to the benefit of the agreement the sum of[l,OOO] as and for liquidated damages SIGNED etc. AB (signature and seal oJ employee)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. In order not to be unenforceable as being in restraint of trade, a covenant by an employee that he will not, after leaving his employment, carry on similar business must be no wider than is reasonably necessary for the protection of the proprietary interests of the employer: see eg Mason v Provident Clothing and Supply Co Ltd [1913) AC 724 HL; Herbert Morris Ltd v Saxelby [1916)1 AC 688, HL. What is reasonable varies according to the circumstances of the particular case, and no one decision is, therefore, a binding authority for any other; see G W Plowman & Son Ltd v Ash [1964) 2 All ER 10 at 12, [1964)1 WLR 568 at 571, CA. Undertakings by an employee not to compete with his employer during the term of his employment are in general free from objection. 2 This is a sufficient consideration for the agreement by the employee, even though the latter may be dismissed at the will of the employer: see Gravely v Barnard (1874) LR 18 Eq 518; and National Provincial Bank of England v Marshall (1888) 40 ChD 112, CA. 3 It is better to state expressly the terms of the agreement than to leave them to be inferred from the condition of the bond; see National Provincial Bank of England v Marshall (1888) 40 ChD 112, CA where an agreement not to do certain things was inferred from a condition that, if done, the obligor should pay a sum of money as liquidated damages, and the obligee was therefore held entitled to prevent the things being done by injunction; but it is a question of construction in each case whether or not the fixed sum is intended to be the price of liberty to do the act complained of: 12 Halsbury's Laws (4th Edn), para 1426 [848]

26
BOND TO SECURE OBEDIENCE to an injunction restraining the obligor from trespassing on the lands of the obligeeBY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for the payment to him of the sum of ... as agreed and liquidated damages and not as a penalty. Sealed with my seal this ... day of ... WHEREAS by the [judgment or order] of the Honourable Mr Justice ... made on the ... day of ... in an action in the High Court of Justice in England intituled

363

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[849]

19... No .... wherein CD was plaintiff and AB was defendant it was ordered that AB should be perpetually restrained from trespassing on the lands of CD situate at ... and known as ... NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case AB shall at all times henceforth fully obey and observe the terms of the above-recited injunction SIGNED etc AB (signature and seal oJ obligor)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. In Strickland v Williams [1899) 1 QB 382 CA the obligee of a bond in a form similar to the above (except that apparently the sum mentioned in the obligation was described as a 'penalty') was held entitled to proceed under RSC Ord 14 and get summary judgment for the full amount of the 'penalty' which was held on the facts to be really liquidated damages. It is better, however, to describe it as liquidated damages where that is meant. For the distinction between a penalty and liquidated damages, see 12 Halsbury's Laws (4th Edn) para 1424. [849]

27
BOND BY VENDOR ofland to indemnify purchaser against claims under missing title deedsBY THIS BOND I AB (vendor) of (address) bind myself to CD (purchaser) of (address) for the payment to him of the sum of ...2 Sealed with my seal this ... day of ... WHEREAS (1) By an agreement dated the ... day of ... AB agreed to sell and CD to purchase all that (parcels) for an estate in fee simple free from incumbrances for the sum of

...
(2) On the investigation of the title of AB it appeared that certain documents of title to the premises namely the documents mentioned or described in the schedule hereto were not in the possession of AB3 and it is not known in whose possession the same are (3) CD nevertheless agreed to complete the purchase upon AB executing as well the conveyance of the premises to CD as also the above-written obligation conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the casesfollowing: 1 In case all the documents shall be found and delivered to CD or his successors in title free of expense+ to him or them and without notice of or effectually freed and discharged from any estate right or claim in to or upon the premises adverse to or in derogation of the title of CD or his successorsin title on the part of any person claiming or appearing to be entitled to claim under or by virtue of the documents or any of them 2 In case during the period of [twelve] years from the date hereof the lands and premises shall be quietly held and enjoyed by CD or his successorsin title without any lawful interruption or disturbance by any person or person claiming under or by virtue of the documents or any of them
SCHEDULE

(Documents) SIGNED etc AB (signature and seal oJ obligor)

[851-860]

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No stamp duty. A bond of this nature may sometimes be used to meet the case where documents of title cannot be found. Of course such a security would not as a rule be considered sufficient in case of leading title deeds of the loss or absence of which no satisfactory explanation is given; but where the documents are not of the first importance or their loss is satisfactorily established, a willing purchaser may be content to take an indemnity of this nature from a solvent vendor, though an insurance policy (if practicable) would generally be preferable. As to registration of title where title deeds are missing, see LAND REGISTRATION. 2 The amount mentioned in the obligation should be large enough to cover all possible risks, including eviction by a paramount title. 3 As to proof of loss and secondary evidence of the contents and execution of missing documents of title, see SALE OF LAND. 4 A vendor is under a general duty to hand over to the purchaser all title deeds coming into his possession which relate exclusively to the property sold: see SALE OF LAND. [850]

28
BOND BY VENDOR to indemnify purchaser against a particular defect in title 1 BY THIS BOND I AB (vendor) of (address) bind myself to CD (purchaser) of (address) for the payment to him of the sum of ... Sealed with my seal this ... day of ... WHEREAS (1) By an agreement dated the ... day of ... AB agreed to sell and CD to purchase all that (parcels) for an estate in fee simple free from incumbrances for the sum of

oo.
(2) On the investigation of the title of AB it appeared that his title depended upon the fact [that oo. late of (address) who died on or about the ... day of ... died without leaving issue living at his death and that in case ... left any such issue then AB would be unable to show or make a good title to the said premises] (3) AB is unable to produce any sufficient evidence that ... left no issue living at his death (4) Nevertheless CD has agreed to complete the purchase upon AB executing the above-written obligation conditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in case the premises shall henceforth be quietly held and enjoyed by CD and his successors in title without any lawful interruption or disturbance on the part of any person or persons being issue of ... who was or were living at his death or claiming through or under such issue or otherwise claiming title to the premises on the ground that ... left issue living at his death SIGNED etc
1 No stamp duty. For what amounts to a defect in title see SALE

AB (signature and seal of obligor)

OF LAND.

[851-860]