Dear friends
Some one has asked for the difference between a contract, service agreement and Bond. Let me try to explain
1. Contract
It is an agreement between two or more parties to do or not to do an act for consideration.
In India we are governed by the Indian Contract Act
Most important aspect of the contract is the term consideration.
To examine the legality of any contract, one of the most important points to be examined is whether the Consideration agreed is permissible under law, and whether it is executionable by the concerned party.
For example, I enter into a contract to sell my house for a consideration of say rs 5 lakhs with a person whose age is above 18, it is a valid contract. Suppose the consideration is that the person shall get her daughter married with my son, then the consideration is not valid
The person who signs this agreement can not execute this consideration hence it is void. We can give more examples.
Employment terms, service agreements
etc all fall under the definition of contract and guided by this law
Service Agreement
Any agreement between two parties for providing service for a consideration is a Service Agreement. Here, in this context, an employee agrees to serve a company say for three years and the consideration is the expenses for higher education will be borne by the company This is a service agreement.
A fresher signs a service agreement for three years for a consideration of company imparting him training for one year is a service agreement
A company asking for service agreement from an employee for training a person abroad is also a service agreement
In these cases explained to me, they are contracts under Indian Contract Act or under the Contract Acts of respective countries.
Generally contracts are written documents. Oral contracts are also permissible. Only difficulty in oral contract is it may be difficult to prove in the court of law if there is a dispute
Bond
I am not very sure about the origin of this word BOND . Bond is usually referred to gurantees given by third parties in case of failures
In money market, Bonds are commonly used. Reserve Bank issues Bonds
When Reserve Bank issues Bonds, it gurantees repayment
Since these service contracts were signed in a Stamped paper and gurantees some payment probably they were referred to as Bonds. I am not very clear about it.
Bond as we use is sort of slang for service agreement not equivelent to Bonds used in money market
Siva