This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Amount $---------. Annual Premium $---------.
Whereas, C. D., of ---------, ---------, hereinafter called the "employe," has been appointed to the office or position of A. B. in the service of---------, hereinafter called the "employer," and has been required to furnish a bond for his honesty in the performance of his duties in the said office or position; and whereas the "employer" has made and delivered to the X. Y. Surety Company, a corporation duly organized and existing under and by virtue of the laws of
Ohio, with its principal office in the City of ---------, ---------, hereinafter called the "company," a statement in writing setting forth the nature and character of the office or position to which employe has been appointed or elected, the nature and character of his duties and responsibilities, and the checks and safeguards to be used upon the employe in the discharge of the duties of said office or position, and other matters, which said statement is made a part hereof.
Now, therefore, in consideration of the sum of --------- dollars ($--------) paid as a premium for the period from ---------, 19-, to ---------, 19-, at 12 o'clock noon, and upon the faith of the said statement of the employer, which the employer hereby warrants to be true, it is hereby agreed and declared, that, subject to the provisions and conditions herein contained, which shall be conditions precedent to the right on the part of the employer to recover under this bond, the company shall, within three months after notice, accompanied by satisfactory proof of a loss as hereinafter mentioned, has been given to the company, make good and reimburse to the employer any and all pecuniary loss sustained by the employer, of money, securities or other personal property in the possession of the employe, or for the possession of which he is responsible, by any act of fraud or dishonesty, on the part of said employe in the discharge of the duties of his office or position as set forth in said employer's statement, amounting to larceny or embezzlement and which shall have been committed during the continuance of this bond or any renewal thereof, and discovered during said continuance or within six months thereafter, or within six months from the death or dismissal or retirement of the employe from the service of the said employer. Provided always, that said company shall not be liable, by virtue of this bond, for any mere error of judgment, or injudicious exercise of discretion on the part of said employe, in and about all or any matters wherein he shall have been vested with discretion, either by instruction or rules and regulations of the said employer. And it is expressly understood and. agreed that the said company shall in no way be held liable hereunder to make good any loss that may accrue to the said employer by reason of any act, or thing done, or left undone, by the said employe, in obedience to, or in pursuance of any discretion, instruction, or authorization conveyed to and received by him from said employer, or its duly authorized officer in its behalf; and it is expressly understood and agreed that the said company shall in no way be held liable hereinunder, to make good any loss by robbery, or otherwise, that the said employer may sustain, except by the direct act or connivance of the said employe.
The following provisions also are to be observed and binding as a part of this bond:
The company shall be notified in writing, addressed to the president of the company at its office in the City of ---------, State of ---------, of any act of omission or of commission on the part of the employe, which may involve a loss for which the company is responsible hereunder, immediately after the occurrence of such act shall come to the knowledge of the employer. That any claim made in respect to this bond shall be in writing, addressed to the president of the company as aforesaid, immediately after the discovery of any loss for which the company is responsible hereunder, and within six months after the expiration, or cancelation, of this bond as aforesaid. And upon the making of such claim, this bond shall wholly cease and determine as regards any liability for any act, or omission of the employe, committed subsequent to the making of such claim, and it shall be surrendered to the company on payment of such claim.
The company shall not in any wise be responsible to the employer under this bond to a greater extent than --------- dollars ($---------).
If the employer shall at any time hold concurrently with this bond, any other bond, or guarantee of security from, or on behalf of the employe, the employer shall be entitled in the event of loss by default of the employe, to claim hereunder only such proportion of the loss as the amount covered by this bond bears to the whole amount of security carried, whether valid or not.
If the company shall so elect this bond may be cancelled at any time by giving one month's notice to the employer, and refunding the premium paid less a pro rata part thereof, for the time said bond shall have been in force, remaining liable for all or any default covered by this bond which may have been committed by the said employe, up to the date of such determination and discovered and notified to the company within the limit of time hereinbefore provided for, but in the event that the employer shall make any claim hereunder either before or after such cancellation, said pro rata part of the premium shall be forfeited and shall be returned to the company if paid by it before claim was filed.
That should the employe become guilty of an offense covered by this bond, the employer will immediately on being requested by the surety to do so, lay information before a proper officer covering the facts and verify the same as required by law and furnish the company every aid and assistance, not pecuniary, capable of being rendered by the employer, his or its agents and servants, which will aid in bringing the employe promptly to justice and such action when required of the employer shall be a condition precedent to recovery under this bond.
The company shall not be liable under this bond for the amount of any balance that may be found due the employer from the employe and which may have accrued prior to the date hereof and which may be discovered within the period hereof nor shall it be liable if, at any time during the continuance of this bond or any renewal thereof, the duties and responsibilities of the employe shall be increased and enlarged or the employe shall, without notice to the company and its written consent thereto obtained, be required or permitted to assume or discharge, either temporarily or otherwise, the duties of any other office or position than that set forth and described in said statement, it being the true intent and meaning of this bond that the company shall be responsible only as aforesaid for moneys, securities, or property diverted from the employer through fraud or dishonesty, amounting to larceny or embezzlement as aforesaid on the part of the employe within the period specified in this bond while in the discharge of the duties of the office or position to which he has been elected or appointed.
This bond will become void as to any claim for which the company is responsible hereunder to the employer, if the employer shall fail to notify the company of the occurrence of such act immediately after it shall have come to the knowledge of the employer. And if without previous notice to and consent of the company thereto the employer has entrusted or shall entrust the employe with moneys, securities, or personal property after having discovered any act of dishonesty, or condones any act for which the company may be liable hereunder, or makes any settlement with the employe for any loss hereunder this bond shall be null and void, and any wilful misstatement or suppression of facts in any claim made hereunder renders this bond void from the beginning.
No suit or action of any kind against the company for the recovery of any claim upon, under or by virtue of this bond, shall be sustainable in any court of law, or equity, unless such suit or action shall be commenced and the process served on the company within the term of --------- months (--------- days) next after the presentation of such claim, and in case any suit or action shall be commenced against the company after the expiration of the said period of
If the employer's written statement hereinbefore referred to shall be found in any respect untrue this bond shall be void.
The company upon the execution of this bond shall not thereafter be responsible to the employer under any bond previously issued to the employer on behalf of said employe and upon the issuance of any bond subsequent hereto upon said employe in favor of said employer all responsibilities hereunder shall cease and determine, it being mutually understood that it is the intention of this provision that but one (the last) bond shall be in force at one time unless otherwise stipulated between the employer and the company.
This bond is issued on the express understanding that the employe has not within the knowledge of the employer at any former period been a defaulter and will be invalid and of no effect unless signed by the employe.
No one of the above conditions or the provisions contained in this bond shall be deemed to have been waived by or on behalf of said company unless the waiver be clearly expressed in writing over the signatures of its president and secretary and its seal thereto affixed.
And the said employe doth hereby for himself, his heirs, executors and administrators, covenant and agree to and with the said company that he will save, defend and keep harmless the said company from and against all loss and damage of whatsoever nature or kind and from all legal and other costs and expenses direct or incidental which the said company shall or may at any time sustain or be put to (whether before or after any legal proceedings by or against it to recover under this bond, and without notice to him thereof) or for or by reason or in consequence of the said company having entered into the present bond.
In witness whereof, etc.