What Is A Bond Of Indemnity?

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What Is A Bond Of Indemnity?

Anindemnitybondisanobligationthatprotectsthelenderiftheborrowerviolates theterms&circumstancesoftheloanobtained.Itismostlyusedinthelendingand mortgageindustries.Anindemnitybondiscreatedusingstamppaperthathasa differentmonetaryvalueineachstate.Notably,itoccursinanumberofformatsand isdesignedtosatisfyone'sdesiresaswellaslegalobligations.

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Anindemnitybondisapromisemadebysomeonesigningacontracttocoverlosses intheeventthattheagreementisbroken.Thismeansthatthelenderwillhave everyrighttocollectlossesanddamagesresultingfromadefaultingpartyifa personisrequiredtofulfilcontractualobligationsbutchoosesnottodoso.Continue readingtolearnmoreabouttheindemnitybond.

What does "indemnity" refer to?

TheLatinwordIndemnis,whichmeaningunharmedandfreefromlossorinjury,is wherethewordindemnityfirstappeared.Inordertoreflectthetruemeaning,this wordhasbeenappropriatedtodescribetheindemnitybondcontractinlaw.

What exactly is an indemnity bond?

AccordingtoSection124oftheIndianContractActof1872,anindemnitybondisa contractbetweentwopeopleorpartieswhereinoneofthepartiesundertakesto compensatetheotherforlossesanddamagesincurredbythelatterduetothe former'sorthelatter'sactions.Inotherterms,itisafinancialagreementmade betweentwopartiesthatassuressomeoneoffinancialsecuritybyallowingthe partywhowaswrongedtoseekmonetarydamagesintheeventthattheagreement isbroken.Themortgage,accounting,legal,IT,andinsurancesectorsarewherethe indemnitybondismostfrequentlyemployed.

In what states and languages is an indemnity bond known? (Kannada, Telegu, Marathi)

Hereisabreakdownofhowindemnitybondsarereferredtoinvariouscountries andlanguages:

State Language Indemnity bond name Assam Assamese

Maharashtra Marathi

Bihar,UttarPradesh, Jharkhand,Madhya

Pradesh,Delhi, Chhattisgarh,Chandigarh, Haryana,Himachal Pradesh,Rajasthan, Uttarakhand

Telangana&Andhra Pradesh Telugu

Odisha Odia

Karnataka Kannada

ক্ষতিপূৰণবণ্ড
नुकसानभरपाईबााँड
Hindi क्षतिपूतििबाांड WestBengal&Tripura Bengali (ক্ষতিপূরণ-পত্র,খেসারি নামা) Kṣatipūraṇa-patra, khēsāratanāmā Gujarat Gujarati ક્ષતિપૂતિિબોન્ડ
(నష్పరిహారంబండ్) Naṣṭaparihāraṁbāṇḍ
നഷ്ടപരിഹാര ബ ാണ്ട് naṣṭaparihārabēāṇṭ
କ୍ଷତିପୂରଣବନ୍ଧ
ಪರಿಹಾರಬಾಂಡ್ (PariharaBond)
Kerala Malayalam

TamilNadu Tamil

Indemnity bonds: Uses

 Forinformationonthefundamentalapplicationofanindemnitybond,seethe sectionbelow:

 Theindemnitybondsguaranteemonetarycompensationintheeventthata contractisbrokenasaresultofanycriminalactivity.

 Drawinganindemnitybondisprimarilydonetoprotecteitherpartyfromthe anticipatedloss.

 Anothertypeofindemnitybondisasuretybond,inwhichtheguarantorpays thesumguaranteedintheeventthattheagreementisbroken.

What kinds of indemnity bonds are there?

Atime-limitedindemnificationbondisdrawnbetweentwoparties.Therearenow sixdifferenttypesofindemnitybonds:

 Leaseagreement

 Supplyagreement

 Loanagreement

 Licensingagreement

 Legalcontracts

 Commercialcontracts

) Iḻappīṭupattiram
(இழப்பீடுபத்திரம்

What distinguishes an affidavit from an indemnity?

Indemnityandaffidavitaretwooftenusedlegalphrases.Theydisagreedespite havingasimilarappearance.Asthetermsuggests,indemnityreferstoanyformof securityorprotectionthatonepersonorentityisprovidingtoanother.The Affidavit,ontheotherhand,isformallyawrittendeclarationcreatedtosupportthe veracityofanytruthbeforeacourtoflaw.

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