An
Indenture is a legal
contractIn law, a contract is a binding legal agreement that is enforceable in a court of law. That is to say, a contract is an exchange of promises for the breach of which the law will provide a remedy....
between two parties, particularly for
indentured labourAn indentured servant is a laborer under contract to an employer for a fixed period of time, typically three to seven years, in exchange for their transportation, food, clothing, lodging and other necessities...
or a term of
apprenticeshipApprenticeship is a system of training a new generation of practitioners of a skill. Apprentices or protégés build their careers from apprenticeships...
but also for certain
landReal estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.
"Real estate" The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin...
transactions. The term comes from the medieval English "indenture of retainer" — a legal contract written in duplicate on the same sheet, with the copies separated by cutting along a jagged (toothed, hence the term "in
denture") line so that the teeth of the two parts could later be refitted to confirm authenticity.
An
Indenture is a legal
contractIn law, a contract is a binding legal agreement that is enforceable in a court of law. That is to say, a contract is an exchange of promises for the breach of which the law will provide a remedy....
between two parties, particularly for
indentured labourAn indentured servant is a laborer under contract to an employer for a fixed period of time, typically three to seven years, in exchange for their transportation, food, clothing, lodging and other necessities...
or a term of
apprenticeshipApprenticeship is a system of training a new generation of practitioners of a skill. Apprentices or protégés build their careers from apprenticeships...
but also for certain
landReal estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.
"Real estate" The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin...
transactions. The term comes from the medieval English "indenture of retainer" — a legal contract written in duplicate on the same sheet, with the copies separated by cutting along a jagged (toothed, hence the term "in
denture") line so that the teeth of the two parts could later be refitted to confirm authenticity. Each party to the deed would then retain a part. When the agreement was made before a court of law a
tripartite indenture was made, with the third piece kept at the court. The term is used for any kind of
deedA deed is a signed and usually sealed legal instrument in writing used to grant a right. Deeds have historically been part of the broader category of instruments under seal, requiring only the affixing of a common seal to render them valid. Today, however, deeds are instruments in solemn form...
executed by more than one party, in contrast to a
deed pollA deed poll is a legal document binding only to a single person or several persons acting jointly to express an active intention. It is, strictly speaking, not a contract because it binds only one party and expresses an intention instead of a promise.The most common use is a name change through a...
which is made by one individual. In the case of
bondsIn finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest and/or to repay the principal at a later date, termed maturity...
, the indenture shows the pledge, promises, representations and covenants of the issuing party.
In
EnglandEngland is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west and the North Sea to the east, with the English Channel to the south separating it from continental...
the earliest surviving examples are from the thirteenth century. These are agreements for military service, proving that a paid, contract army was then in existence, although other evidence indicates that the method had already been in use for at least two hundred years.
ExchequerThe Exchequer was a part of the governments of England , Scotland, and Northern Ireland that was responsible for the management and collection of revenues...
records of
Henry VHenry V was King of England from 1413 until his death. From an unassuming start his military successes in the Hundred Years' War, culminating with his famous victory at the Battle of Agincourt, saw him come close to uniting the realms of England and France under his rule.-Early life:Henry was born...
's French campaign of 1415 (the "
AgincourtThe Battle of Agincourt was an English victory against a much larger French army in the Hundred Years' War. The battle occurred on Friday 25 October 1415 , in northern France...
" campaign), including the indentures of all the captains of the army agreeing to provide specified numbers of men and at what cost, may still be read. An Indenture was commonly used as a form of sealed contract or agreement for land and buildings. An example of such a use can be found in the National Archives, where an indenture, from about 1401, recording the transfer of the
manorManorialism or Seigneurialism or Feudal Society was the organizing principle of rural economy and society widely practiced in medieval western and parts of central Europe...
of Pinley,
WarwickshireWarwickshire is a landlocked non-metropolitan county in the West Midlands region of England. The county town is Warwick, although the largest town is Nuneaton in the far north of the county. The shape of the administrative area Warwickshire differs considerably from that of the historic county...
, is held.
In the early history of the United States, many European immigrants served a period of indentured labour in order to pay the cost of their transportation. This practice was common during the 17th and 18th centuries, where over half of immigrants worked off an average of three years servitude.
Modern usage
Bond Indenture (also trust indenture or deed of trust) is a legal document issued to lenders and describes key terms such as the
interest rateAn interest rate is the price a borrower pays for the use of money they do not own, for instance a small company might borrow from a bank to kick start their business, and the return a lender receives for deferring the use of funds, by lending it to the borrower...
, maturity date,
convertibilityIn finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
, pledge, promises, representations, covenants, and other terms of the bond offering. When the
Offering MemorandumA prospectus is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers. A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the...
is prepared in advance of marketing a Bond, the indenture will typically be summarised in the 'Description of Notes' section.
See also
- Slavery
Slavery is a form of forced labor in which people are considered to be the property of others. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to receive compensation...
- Capital markets
- Prospectus
A prospectus is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers. A prospectus commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the...
- Securities law
- Indentured servant
An indentured servant is a laborer under contract to an employer for a fixed period of time, typically three to seven years, in exchange for their transportation, food, clothing, lodging and other necessities...
External links