A legal obligation, most often financial, to respond in damages in the event of an accident. It may be imposed by an act of law or assumed under a contract.
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AVERAGE BOND
In maritime law, on the occurrence of a general average act the carrier has a lien on the cargo. To secure release of cargo, the cargo owner has to pay a deposit (usually a percentage of the value of his cargo) or alternatively produces an Insurer’s Guarantee of the eventual calculated contribution amount due by the cargo owner. At the time of payment of the deposit or production of the guarantee the consignee or cargo owner will be required to sign an Average Bond or “General Average Agreement” by which he agrees to the procedure for calculation of the general average adjustment and to pay his rateable proportion thereof. It is customary for the average bond or agreement to be countersigned by a guarantor or the consignee’s or cargo owner’s bankers.