Bonds and UndertakingsLiability of Principal and Sureties
Section § 996.410
If you are promised something through a bond, you can take legal action against the person who made the promise (the principal) and anyone guaranteeing them (the sureties) to enforce the bond. Even if the bond is meant for a group of people, any individual in that group can take action on the bond on their own, without needing permission or a formal transfer of rights.
Section § 996.420
If you're a surety, which means you are guaranteeing a bond in a legal case, you automatically agree that the court can make decisions about your responsibilities under that bond. However, this rule doesn't apply if the bond is for a public officer or someone managing assets on behalf of another, known as a fiduciary.
Section § 996.430
If someone wants to enforce a bond, they can do so through a civil lawsuit. The person who made the bond and the people who guaranteed it must all be included in the lawsuit. If the bond was related to an existing court case, the new lawsuit should start in the same court. Otherwise, it can be started in any court that can handle the case based on the claimed damages. Also, the right to sue on a bond can be transferred or assigned like other legal claims.
Section § 996.440
If you have a bond related to a court case, you can enforce it directly in that court instead of filing a separate lawsuit. This can only be done after the case is completely finished, including any appeals, and within one year of that time. You have to give the bond's principal and surety a 30-day notice before asking the court to enforce the bond. You must show the amount you claim and provide proof for your claim. If they disagree, they need to submit proof too, and the court will decide if a trial is needed. Things move quickly, and they can't pause the process just because there are competing claims about who gets the money.
Section § 996.450
This law says that any part of a bond contract trying to make you sue sooner than what's legally allowed is not valid, unless everyone involved—like the ones who made the bond and the ones who are supposed to benefit—agree to a shorter time limit.
Section § 996.460
This law explains how liability on a bond is enforced in favor of the beneficiary. It states that if there is a judgment against the bond, both the principal (the one who took out the bond) and the sureties (those guaranteeing the bond) are equally responsible to pay. The court decides the amount of the judgment, which does not end the bond until the entire bond amount is used up. The beneficiary can directly seek payment from the sureties, and sureties can later seek reimbursement from the principal if they pay on their behalf.
Section § 996.470
This law section explains how much financial responsibility or liability a surety, which is someone who guarantees another person’s obligation, has in relation to a bond. Typically, a surety’s total responsibility for all breaches of a bond's conditions is capped at the bond’s amount. However, the person who is primarily responsible (the principal) might have to cover more than the bond amount. If a bond is issued for more than legally required without a specific agreement to raise it, the surety’s liability is limited to the minimum required amount. In certain conditions, like having a bond stipulation about a surety's limited worth, the liability can be less than the bond amount.
Section § 996.475
This section clarifies that the liability of a surety, which is someone who guarantees another's debt or obligation, is not restricted by this chapter. It simply states that the current law is being reiterated, not altered.
Section § 996.480
When a court has decided the liability of a person who made a promise (the principal), and there's no more chance for an appeal, the person who agreed to pay if the principal doesn't (the surety) can pay the bond early. If a surety doesn't pay after being asked, they could have to cover court costs and attorney fees. If a surety only pays part of what they owe, it's not enough, and any penalties like suspensions remain until the full amount is covered.
Section § 996.490
If a surety (a guarantor who promises to pay a bond if the main party cannot) pays the full amount of the bond, they are no longer responsible for any more debt related to that bond. If there are multiple sureties, each one must help pay back another surety who has already paid more than their share, based on how much each surety was responsible for initially.
Section § 996.495
If someone is found liable on a bond, they can be made to pay up just like they would with any other court-ordered money judgment.