Payee Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Payee, written in plain English, along with examples of how it is used.
What is Payee?
The person who under a promissory note or check lends money as loan and who receives the payment at the due date.
History and Meaning of Payee
The term "payee" is commonly used in financial transactions, especially in the context of checks and promissory notes. The payee is the individual or organization to whom payment is made. The term has its origins in Anglo-French and Middle English, and has been used in legal documents for centuries.
In general, the payee is the person or entity that has a legally binding right to receive payment. This can include creditors, employees, and vendors, among others. If a check or promissory note is made payable to a specific person or organization, that person or organization is the payee.
Examples of Payee
- When you write a check to your landlord for rent, your landlord is the payee.
- If you take out a loan from a bank, the bank is the payee.
- If your company hires an independent contractor to do work, the contractor is the payee.
- If you have an insurance policy and need to file a claim, the payee is the person or entity to whom the insurance company will make the payment.
- In a divorce settlement, if one spouse is required to pay spousal support to the other, the recipient of the support payments is the payee.
Legal Terms Similar to Payee
- Payer: The individual or entity that is making the payment.
- Endorsee: A person who endorses a check or other negotiable instrument.
- Drawer: The person who writes the check or promissory note.
- Holder: The individual or entity that possesses a check or other negotiable instrument.
- Obligee: The person or entity to whom an obligation is owed.