A Statutory Bond is a bond issued in the surety industry. Simply stated, this type of bond must comply with a statute or law. The liability of the bond for the surety and principal is dictated by the statute or law that requires the bond.
The differences are notable. With a statutory bond, the statute itself determines the conditions of the applicable bond. A statutory bond must not enlarge or reduce the conditions required by the legal statute. A conventional bond is administered by the intention and language used in the bond document. A conventional bond may be qualified, conditioned or limited in a legally acceptable manner.