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
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
What distinguishes an affidavit from an indemnity?
Indemnityandaffidavitaretwooftenusedlegalphrases.Theydisagreedespite havingasimilarappearance.Asthetermsuggests,indemnityreferstoanyformof securityorprotectionthatonepersonorentityisprovidingtoanother.The Affidavit,ontheotherhand,isformallyawrittendeclarationcreatedtosupportthe veracityofanytruthbeforeacourtoflaw.
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