Maturity Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Maturity, written in plain English, along with examples of how it is used.
What is Maturity?
(n) Maturity is the reaching of the specified time or point to convert a process, obligation, provision, ability etc ripe for execution or existence. Eg. Maturity date for return of deposit. Eg. Maturity age for entering in to valid contract
History and Meaning of Maturity
Maturity is widely used in the legal industry to define the point at which a process, transaction or obligation is due for execution. This term has its roots in the Latin word "maturus", which means "ripe". The concept of maturity, therefore, refers to entering into a state of ripeness in which an action or event is capable of being brought to fruition.
Examples of Maturity
- Maturity Date for Bonds - This refers to the date on which a bond or other fixed-income instrument becomes due for payment.
- Maturity of Contracts - Contracts are legally binding agreements with a set term, after which they may expire or come up for renewal. When a contract reaches its maturity, it is either terminated or renegotiated.
- Maturity of Insurance Policies - Insurance policies typically come with a set term of coverage, after which they may be renewed or expire. At this point, the beneficiary may elect to let the policy lapse, renew it, or select a different policy altogether.
- Maturity of Investment Vehicles - Many investment products, such as CDs and annuities, have set maturity dates that trigger certain events, such as the payment of interest or the distribution of principal.
Legal Terms similar to Maturity
- Termination - Termination is similar to maturity in that it refers to the ending of a process or obligation, but it may not necessarily imply the completion of that process or obligation. For example, a contract may be terminated before its maturity date if one party breaches the terms of the agreement.
- Expiration - Expiration refers to the reaching of the end of a set term or period of time, after which a process or transaction may no longer be valid. This is similar to maturity, but emphasizes the end of a specific timeline rather than the action or event itself.
- Default - Default refers to the failure to fulfill an obligation, which may trigger certain consequences such as the acceleration of a loan or the termination of a contract. While not necessarily related to the concept of maturity, default may occur when a process or obligation has not reached a state of ripeness or completion by a certain point in time.