What is the difference between a bond and an agreement? Can someone shed some light here?
As per my understanding of the law:
What is a bond?
A bond is a written and signed promise to pay a certain sum of money on a specific date or upon the fulfillment of a specified condition. All documented contracts and loan agreements fall under the category of bonds. Additionally, as per section 2(5) of the Indian Stamp Act, a bond is defined as:
(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;
(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and
(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another.
Now, what is an agreement? It is defined under the Indian Contract Act as:
Section 2(h) of the Act defines the term contract as "an agreement enforceable by law."
Section 2(e) defines an agreement as "every promise and every set of promises, forming the consideration for each other."
Furthermore, Section 2(b) defines a promise as "when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise."
All these fall under service agreements. In essence, a bond is a narrower term, whereas agreements are more generic. All bonds are agreements.
Therefore, it is essential to understand the meanings of both terms before offering suggestions on the matter at hand.
Regarding the question posed by a member on whether they can break a service agreement or bond that requires them to serve the organization for a specified period:
Such agreements are neither inherently legal nor illegal; their validity depends on the facts and circumstances of each case.
If it is a simple agreement and the organization has not incurred any expenses on your training or development, they cannot claim anything from you other than denying you a relieving letter, for instance. They cannot enforce such terms in a court of law.
However, if the organization has invested in your training, you may be liable to reimburse the actual costs incurred for your skill development or training. In such cases, the court may only require you to repay the specific amount spent, not the entire bond amount. Such agreements are typically referred to as training agreements or bonds and are applicable for a reasonable duration.
Regards