What does bottomry bond mean?

bottomry bond meaning in Law Dictionary

The tool embodying the contract or contract of bottomry. The real definition of a bottomry relationship, in sense of the overall maritime legislation, and in addition to the unusual regulations associated with the positive codes various commercial nations, is that it is a contract for a financial loan of money regarding the base for the ship, at a fantastic interest, upon maritime dangers, to-be borne by l he lender for a vovage. or even for a definite period. The Draco, 2 Sumn. 157, Fed. Cas. No. 4,057; Cole v. White. 26 Wend. (N. Y.) 515; Greely v Smith, 10 Fed. Cas. 1077; The Grapeshot, 9 Wall. 135, 19 L. Ed. 651.

bottomry bond meaning in Business Dictionary

Older kind of bond or promissory note guaranteed by a ship as security, released by the ship's captain who urgently required cash but could not contact the shipowners (or once they lacked creditworthiness). It absolutely was known as 'bottomry' because initially just the ship's keel (thus the ship construction) ended up being intended to be pledged, not the cargo becoming carried. The pledged ship cannot be sold before its bottomry bonds were reduced, but all such statements were immediately canceled in the event that ship ended up being lost. See also maritime lien.