Obligor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Obligor, written in plain English, along with examples of how it is used.
What is Obligor?
n.In an obligation,a person or an entity bound by legal agreement to pay or act, to another person is called an obliger.
History and Meaning of Obligor
An obligor is an individual or legal entity who is responsible for fulfilling an obligation or a debt, usually as part of a legal agreement. This term is typically used in the context of financial transactions, such as loans or bonds, where one party lends money to another and the borrower agrees to pay back the principal and interest over a set period of time. The obligor is legally bound by the terms of the contract to repay the debt, and failure to do so can lead to legal action by the lender.
Examples of Obligor
- A person who takes out a mortgage to buy a house is the obligor, with the bank or other lending institution serving as the obligee.
- A company that issues bonds to raise capital is the obligor, with the bondholders being the obligees.
- A government that borrows money by issuing sovereign bonds is the obligor, with investors who buy the bonds serving as the obligees.
- A tenant who signs a lease for an apartment is the obligor, with the landlord being the obligee.
Legal Terms Similar to Obligor
- Obligee: The party who is owed an obligation or a debt by the obligor.
- Debtor: Another word for the obligor in the context of debt or financial obligations.
- Creditor: The entity or person who is owed a debt by the obligor.
- Guarantor: A third party who assumes some or all of the obligations of the obligor, usually as part of a guarantee or surety agreement.