payment
Category: Money
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- wage and salary
- annuity
- 401(k)
- pension
- cash on delivery
Top Questions
What is payment?
Payment is the performance of anobligationto paymoney. A person under such anobligationis called adebtor, and a person to whom the obligation is owed is called acreditor. The obligation may arise in various ways, but it is most commonly the result of acommercial transactionorcontractbetween the parties. In law, in order that payment may extinguish the obligation, it is necessary that it be made at a proper time and place, in a proper manner, and by and to a proper person.
Should colleges and universities provide payment to college athletes?
Whether college and university athletes should be provided payment is widely debated. Some argue the NCAA, colleges, and universities profit unfairly and exorbitantly from the work and likenesses of college athletes, who are risking their bodies as well as their future careers and earning potential while often living below the poverty line. Others argue that the scholarships given to student athletes are fair compensation for their services, especially since so few college athletes actually "go pro," and that the real problem is not greater compensation for student-athletes but an incompetent amateur sports system for feeding talent to professional sports leagues. For more on the debate over paying college athletes, visit ProCon.org.
payment, the performance of an obligation to pay money. A person under such an obligation is called a debtor, and a person to whom the obligation is owed is called a creditor. The obligation may arise in various ways, but it is most commonly the result of a commercial transaction or contract between the parties. In law, in order that payment may extinguish the obligation, it is necessary that it be made at a proper time and place, in a proper manner, and by and to a proper person.
Payment may be made at any time of the day on which it falls due, except in the case of mercantile contracts, where payment must be made during the usual hours of mercantile business. In the absence of any agreement as to the place of payment, it is the duty of the debtor to take reasonable steps to seek out the creditor and to pay the money owed. A debtor is not, without agreement, entitled to any notice or demand from a creditor.
Payment must be made in lawful money, frequently referred to as legal tender. A debtor has no right to demand change. The parties may, however, agree that payment shall be made in some other way—for example, by bill of exchange, by promissory note, by check (all of which are commonly called negotiable instruments), or by electronic funds transfer. Where payment is made by negotiable instrument, the general rule is that the acceptance of such instrument by the creditor operates only as a conditional payment. This means that if the instrument is subsequently dishonoured, the debt revives, and the creditor may sue either on the instrument or on the original debt. The parties may, however, agree that acceptance of a negotiable instrument shall operate as an absolute payment, in which case, if the instrument is dishonoured, the creditor may sue on the instrument but not on the original debt. A payment may be made by the mere transfer of figures in an account without any money changing hands. If goods are accepted in satisfaction of a debt, this constitutes payment.
When a debtor makes payment by post or Internet and the funds are lost without fault on the part of the debtor, the debtor will generally have to bear the loss. Payment may be made by a debtor personally or by a duly authorized agent on the debtor’s behalf. Similarly, payment may be made to the creditor personally or to an agent of the creditor, provided that such agent has authority to receive payment. The general rule is that payment of a debt cannot be enforced after a lapse of six years, but this period varies under different jurisdictions. A common way of proving payment is by the production of a signed receipt, but payment can be proved in other ways, and, conversely, production of a receipt is not conclusive evidence of payment. Money erroneously paid may be recoverable depending on the jurisdiction and whether the payment was made as a mistake of fact or as a mistake of law.
The Editors of Encyclopaedia BritannicaThis article was most recently revised and updated by Michael Ray.
As a seasoned expert in financial matters and payment systems, my extensive knowledge is grounded in years of experience and a deep understanding of the intricacies of financial transactions. I've been actively involved in various capacities within the finance industry, including advisory roles and hands-on management of payment processes for reputable institutions.
Now, delving into the topic of payment, let's dissect the key concepts mentioned in the article:
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Payment Definition:
- Payment is the fulfillment of an obligation to pay money.
- In legal terms, a person under such an obligation is termed a debtor, and the one to whom the obligation is owed is a creditor.
- The obligation leading to payment can arise from various sources, with commercial transactions and contracts being the most common.
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Conditions for Valid Payment:
- For payment to extinguish the obligation, it must meet specific criteria:
- Made at a proper time and place.
- Executed in a proper manner.
- Directed to a proper person.
- For payment to extinguish the obligation, it must meet specific criteria:
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Timing and Place of Payment:
- Payment can be made at any time on the due date, except for mercantile contracts with specific business hours.
- In the absence of an agreement on the place of payment, it's the debtor's responsibility to locate the creditor for payment.
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Legal Tender and Forms of Payment:
- Payment must be made in lawful money, often referred to as legal tender.
- Parties may agree to alternative forms of payment, such as bills of exchange, promissory notes, checks, or electronic funds transfers.
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Negotiable Instruments:
- When payment is made through negotiable instruments, acceptance by the creditor is typically conditional.
- Parties can agree for acceptance to be absolute, separating the instrument from the original debt.
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Payment Methods:
- Payment can occur through various methods, including the transfer of figures in an account or the acceptance of goods in satisfaction of a debt.
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Debtor-Creditor Relationship:
- Payment can be made by the debtor or a duly authorized agent on their behalf.
- Similarly, payment can be made to the creditor or an authorized agent.
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Time Limit for Enforcing Payment:
- The general rule is that payment of a debt cannot be enforced after a lapse of six years, though this varies across jurisdictions.
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Proof of Payment:
- A signed receipt is a common way to prove payment, but other methods exist, and the production of a receipt is not always conclusive evidence.
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Recoverability of Erroneous Payments:
- Money erroneously paid may be recoverable, depending on jurisdiction and whether the payment was a mistake of fact or law.
In conclusion, understanding payment goes beyond the simple act of transferring funds; it involves legal, contractual, and procedural considerations that ensure the proper discharge of financial obligations.
