Payor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Payor, written in plain English, along with examples of how it is used.
What is Payor?
The person, institution of government who is responsible for making of the payment to the payee as mentioned in the promissory note or bills of exchanges.
History and Meaning of Payor
A payor, by definition, is the person or party who makes a payment to the payee as stated in a financial instrument like a promissory note, check or other negotiable instrument. The payor can be an individual person, a government entity, or an institution.
Examples of Payor
Here are some examples of how the term "payor" is used in different contexts:
- John is the payor on a check he wrote to his landlord for rent.
- The insurance company that covers Jane's car is the payor in the event of an accident.
- The state government is the payor for the unemployment benefits received by laid-off workers.
- The bank acting as the payor on a promissory note pays the requested amount to the payee on behalf of the debtor who issued the note.
- The payor can also be referred to as the "drawer" of a check or other negotiable instrument.
Legal Terms Similar to Payor
Here are some related legal terms:
- Payee: the person, company or institution who receives payment from the payor.
- Drawer: the person who creates a promissory note, check or other negotiable instrument, thereby summoning the payor to make a payment.
- Beneficiary: the individual, company or institution who is entitled to receive some benefit under a will, trust or other legal document. Sometimes, the beneficiary can be the payee.