Contract vs. Bond — What's the Difference?

Enforced through the civil justice system; breaches may result in legal consequences.

Investors can sell their bonds on secondary markets before they mature.

A legal agreement between parties that creates mutual obligations enforceable by law.

A debt security, typically used by governments and corporations to raise funds.

Requires elements like offer, acceptance, and consideration to be legally binding.

Pays periodic interest, known as coupon payments, to the bondholders.

Can be verbal or written, but more complex agreements are typically documented.

Subject to the terms of the bond indenture which includes the bond’s maturity date and interest rate.

Used across a wide variety of contexts from real estate to services.

Risk levels can vary, generally safer than stocks, but dependent on the issuer's credit rating.

A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law.

Something, such as a fetter, cord, or band, that binds, ties, or fastens things together.

An agreement between two or more parties, especially one that is written and enforceable by law.

Often bonds Confinement in prison; captivity.

The writing or document containing such an agreement.

A uniting force or relationship; a link

The branch of law dealing with formal agreements between parties.

A binding agreement; a covenant.

Marriage as a formal agreement; betrothal.

A duty, promise, or other obligation by which one is bound.

The last and highest bid of a suit in one hand in bridge.

A substance or agent that causes two or more objects or parts to cohere.

The number of tricks thus bid.

The union or cohesion brought about by such a substance or agent.

Contract bridge.

A chemical bond.

A paid assignment to murder someone

A systematically overlapping or alternating arrangement of bricks or stones in a wall, designed to increase strength and stability.

To enter into by contract; establish or settle by formal agreement

A written obligation requiring the payment of a sum at a certain time.

To acquire or incur

A debt security obligating a government or corporation to pay a specified amount on a future date, especially a marketable security that makes semiannual interest payments.

To reduce in size by drawing together; shrink.

A guarantee issued by a surety agency on behalf of a client, requiring the surety to pay a sum of money to a third party in the event the client fails to fulfill certain obligations; a surety bond.

To pull together; wrinkle.

A sum pledged as a guarantee.

(Grammar) To shorten (a word or words) by omitting or combining some of the letters or sounds, as do not to don't.

A sum paid as a guarantee of a person's appearance at court for trial; bail

To enter into or make an agreement

The condition of being held under the guarantee of a customs bond

To become reduced in size by or as if by being drawn together

An insurance contract that indemnifies an employer for loss resulting from a fraudulent or dishonest act by an employee; a fidelity bond.

An agreement between two or more parties, to perform a specific job or work order, often temporary or of fixed duration and usually governed by a written agreement.

Bond paper.

(legal) An agreement which the law will enforce in some way. A legally binding contract must contain at least one promise, i.e., a commitment or offer, by an offeror to and accepted by an offeree to do something in the future. A contract is thus executory rather than executed.

To join securely, as with glue or cement.

(legal) The document containing such an agreement.

To join (two or more individuals) in a relationship, as by shared belief or experience

(legal) A part of legal studies dealing with laws and jurisdiction related to contracts.

To finance by issuing bonds

(informal) An order, usually given to a hired assassin, to kill someone.

To raise by issuing bonds

(bridge) The declarer's undertaking to win the number of tricks bid with a stated suit as trump.

To gain the release of (someone who has been arrested) by providing a bail bond

(obsolete) Contracted; affianced; betrothed.

To issue a surety bond or a fidelity bond for.

(obsolete) Not abstract; concrete.

To lay (bricks or stones) in an overlapping or alternating pattern.

(ambitransitive) To draw together or nearer; to shorten, narrow, or lessen.

To cohere with a bond.

(grammar) To shorten by omitting a letter or letters or by reducing two or more vowels or syllables to one.

To form a close personal relationship.

(transitive) To enter into a contract with. en

To secure release from prison by providing a bail bond

(transitive) To enter into, with mutual obligations; to make a bargain or covenant for.

(legal) Evidence of a long-term debt, by which the bond issuer (the borrower) is obliged to pay interest when due, and repay the principal at maturity, as specified on the face of the bond certificate. The rights of the holder are specified in the bond indenture, which contains the legal terms and conditions under which the bond was issued. Bonds are available in two forms: registered bonds, and bearer bonds.

(intransitive) To make an agreement or contract; to covenant; to agree; to bargain.

(finance) A documentary obligation to pay a sum or to perform a contract; a debenture.

(transitive) To bring on; to incur; to acquire.

A partial payment made to show a provider that the customer is sincere about buying a product or a service. If the product or service is not purchased the customer then forfeits the bond.

(transitive) To gain or acquire (an illness).

A physical connection which binds, a band.

To draw together so as to wrinkle; to knit.

An emotional link, connection or union; that which holds two or more people together, as in a friendship; a tie.

To betroth; to affiance.

Moral or political duty or obligation.

To draw together or nearer; to reduce to a less compass; to shorten, narrow, or lessen; as, to contract one's sphere of action.

(chemistry) A link or force between neighbouring atoms in a molecule.

To draw together so as to wrinkle; to knit.

A binding agreement, a covenant.

To bring on; to incur; to acquire; as, to contract a habit; to contract a debt; to contract a disease.

A bail bond.

To enter into, with mutual obligations; to make a bargain or covenant for.

Any constraining or cementing force or material.

To betroth; to affiance.

(construction) In building, a specific pattern of bricklaying, based on overlapping rows or layers to give strength.

To shorten by omitting a letter or letters or by reducing two or more vowels or syllables to one.

(Scotland) A mortgage.

To be drawn together so as to be diminished in size or extent; to shrink; to be reduced in compass or in duration; as, iron contracts in cooling; a rope contracts when wet.

(railways) A heavy copper wire or rod connecting adjacent rails of an electric railway track when used as a part of the electric circuit.

To make an agreement; to covenant; to agree; to bargain; as, to contract for carrying the mail.

A peasant; churl.

Contracted; as, a contract verb.

A vassal; serf; one held in bondage to a superior.

Contracted; affianced; betrothed.

(transitive) To connect, secure or tie with a bond; to bind.

The agreement of two or more persons, upon a sufficient consideration or cause, to do, or to abstain from doing, some act; an agreement in which a party undertakes to do, or not to do, a particular thing; a formal bargain; a compact; an interchange of legal rights.

(transitive) To cause to adhere (one material with another).

A formal writing which contains the agreement of parties, with the terms and conditions, and which serves as a proof of the obligation.

To form a chemical compound with.

The act of formally betrothing a man and woman.

(transitive) To guarantee or secure a financial risk.

A binding agreement between two or more persons that is enforceable by law

To form a friendship or emotional connection.

(contract bridge) the highest bid becomes the contract setting the number of tricks that the bidder must make

(transitive) To put in a bonded warehouse; to secure (goods) until the associated duties are paid.

A variety of bridge in which the bidder receives points toward game only for the number of tricks he bid

To lay bricks in a specific pattern.

Enter into a contractual arrangement

To make a reliable electrical connection between two conductors (or any pieces of metal that may potentially become conductors).

Engage by written agreement;

To bail out by means of a bail bond.

Squeeze or press together;

Subject to the tenure called bondage.

Become smaller or draw together;

In a state of servitude or slavedom; not free.

Be stricken by an illness, fall victim to an illness;

Servile; slavish; pertaining to or befitting a slave.

Make smaller;

That which binds, ties, fastens, or confines, or by which anything is fastened or bound, as a cord, chain, etc.; a band; a ligament; a shackle or a manacle.

Compress or concentrate;

The state of being bound; imprisonment; captivity, restraint.

Make or become more narrow or restricted;

A binding force or influence; a cause of union; a uniting tie; as, the bonds of fellowship.

Reduce in scope while retaining essential elements;

Moral or political duty or obligation.

A writing under seal, by which a person binds himself, his heirs, executors, and administrators, to pay a certain sum on or before a future day appointed. This is a single bond. But usually a condition is added, that, if the obligor shall do a certain act, appear at a certain place, conform to certain rules, faithfully perform certain duties, or pay a certain sum of money, on or before a time specified, the obligation shall be void; otherwise it shall remain in full force. If the condition is not performed, the bond becomes forfeited, and the obligor and his heirs are liable to the payment of the whole sum.

A financial instrument (of the nature of the ordinary legal bond) made by a government or a corporation for purpose of borrowing money; a written promise to pay a specific sum of money on or before a specified day, given in return for a sum of money; as, a government, city, or railway bond.

The state of goods placed in a bonded warehouse till the duties are paid; as, merchandise in bond.

The union or tie of the several stones or bricks forming a wall. The bricks may be arranged for this purpose in several different ways, as in English bond or block bond (Fig. 1), where one course consists of bricks with their ends toward the face of the wall, called headers, and the next course of bricks with their lengths parallel to the face of the wall, called stretchers; Flemish bond (Fig.2), where each course consists of headers and stretchers alternately, so laid as always to break joints; Cross bond, which differs from the English by the change of the second stretcher line so that its joints come in the middle of the first, and the same position of stretchers comes back every fifth line; Combined cross and English bond, where the inner part of the wall is laid in the one method, the outer in the other.

A unit of chemical attraction between atoms; as, oxygen has two bonds of affinity. Also called chemical bond. It is often represented in graphic formulæ by a short line or dash. See Diagram of Benzene nucleus, and Valence. Several types of bond are distinguished by chemists, as double bond, triple bond, covalent bond, hydrogen bond.

A heavy copper wire or rod connecting adjacent rails of an electric railway track when used as a part of the electric circuit.

League; association; confederacy.

A vassal or serf; a slave.

To place under the conditions of a bond; to mortgage; to secure the payment of the duties on (goods or merchandise) by giving a bond.

To dispose in building, as the materials of a wall, so as to secure solidity.

In a state of servitude or slavery; captive.

An electrical force linking atoms

A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal

A connection based on kinship or marriage or common interest;

(criminal law) money that must be forfeited by the bondsman if an accused person fails to appear in court for trial;

A restraint that confines or restricts freedom (especially something used to tie down or restrain a prisoner)

A connection that fastens things together

A superior quality of strong durable white writing paper; originally made for printing documents

United States civil rights leader who was elected to the legislature in Georgia but was barred from taking his seat because he opposed the Vietnam War (born 1940)

British secret operative 007 in novels by Ian Fleming

The property of sticking together (as of glue and wood) or the joining of surfaces of different composition

Stick to firmly;

Create social or emotional ties;

Issue bonds on

Held in slavery;

Yes, contracts can be verbal or written, though more complex agreements are generally documented for clarity.

Contracts are governed by contract law, which requires elements like offer, acceptance, and consideration.

Contracts can cover a wide range of agreements, including employment, sales, leases, and services.

If a bond issuer defaults, legal recovery processes or restructuring might occur based on the bond terms and laws.

Contracts need to fulfill certain legal criteria like mutual consent and consideration to be legally binding.

The primary purpose of a bond is to raise capital by borrowing money from investors under defined terms.

Breaches of contract are typically resolved through damages or specific performance as dictated by courts.

Bonds are typically issued by governments and corporations looking to raise funds.

Risks include default by the issuer or changes in market interest rates affecting bond prices.

Bond interest payments, or coupons, are usually fixed and paid at regular intervals until maturity.

Contracts are highly customizable, whereas bonds generally follow standardized terms.

Contracts are enforced through legal action which may result in damages or specific performance mandates.

Bondholders may seek legal recourse through the courts or through structured financial restructuring.

Bonds are generally considered safer than stocks, but the safety largely depends on the issuer's creditworthiness.

Unlike loans, bonds involve multiple investors and are tradable on the secondary market.