Penal Bond Law and Legal Definition
Penal bond is a bond that requires the obligor to pay a specified sum as penalty if the underlying obligation is not performed. A penal bond is also termed as penal bill or common-defeasance bond or conditional bond. Payment of penalty in such a bond is often required in government contracts. In the context of a penal bond, a bond is the instrument which binds a party legally to perform a specific act.
