If you’re unfamiliar with surety bonds, it’s just because of the legal jargon surrounding them and the term not being used in regular conversation. Let me give you a quick example of a surety bond. Think bail bonds. If you’re from the US, then you’re familiar with bail bonds for sure. These types of bonds serve as a guarantor for one side of an agreement or contract in case the principal party doesn’t hold up its end of the bargain. In the case of a bail bond, the principal party would be the accused.
Have you ever had any experience dealing with surety bonds? There are many businesses that deal with these bonds, including the auto industry. Other countries use them, too, so they’re not just something the US uses. So where do these bonds come from? In other words, who issues them? If you look them up to find out more about them, you’re going to see that banks are one entity that handle these bonds, and surety companies also handle them as well.
These bonds in essence represent surety credit, and that means it is going to cost the person who is being upheld by the guarantor. The process is handled a certain way, and if you’re not sure about the legalities of a bond agreement you’re about to enter into, you need to know. So many people that enter into a bail bond agreement don’t take the contract seriously enough and end up making things complicated for all involved.
In fact, this happened to me when I was younger. I was arrested on a misdemeanor charge, and it was going to be dismissed if I took care of certain things and then appeared again. Well, I didn’t realize I had to appear in court again, and I ended up moving to Texas because I thought the matter was resolved. So it turns out that while it was a simple mistake, I really messed up one of those bonds. That’s not how you want things to happen.
There are certain types of situations that can arise if the person called the ‘principal’ doesn’t hold up his or her end of the bargain. In the case of the bail bond, I was he principal, as I was the one who was bonded out of jail and was supposed to appear in court a second time and didn’t know. It was my responsibility to know of course, but I still didn’t know. While it was an honest mistake, it caused quite a few problems for others and also myself.
Do you know what nugatory means? What about penal sum? There are particular legal terms that you might want to brush up on if you’re not familiar so that you don’t wind up in the same situation I did. If you are going to be part of a surety bond, then you need to know what you’re getting yourself into. Are you comfortable with the terminology now, or do you still need some more information?