Indenture

Indenture

[in-den-cher]
An Indenture is a legal contract between two parties, particularly for indentured labour or a term of apprenticeship but also for certain land 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 "indenture") 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 deed executed by more than one party, in contrast to a deed poll which is made by one individual. In the case of bonds, the indenture shows the pledge, promises, representations and covenants of the issuing party.

In England 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. Exchequer records of Henry V's French campaign of 1415 (the "Agincourt" 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 ca. 1401 recording the transfer of the manor of Pinley, Warwickshire, 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 the interest rate, maturity date, convertibility, pledge, promises, representations, covenants, and other terms of the bond offering.

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