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LSDefine
Simple English definitions for legal terms
advance payment
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A quick definition of advance payment:
An advance payment is when you pay for something before you actually get it. This can happen when you know you will owe money in the future, but you want to pay some of it now. For example, if you want to buy a toy that costs $10, but you only have $5 right now, you might make an advance payment of $5 to the store and promise to pay the other $5 later. Advance payments can also be made for things like rent or services that will be provided in the future.
A more thorough explanation:
An advance payment is a payment made in anticipation of a future liability or obligation. It is a payment made before the goods or services are delivered or before the work is completed.
- When you book a hotel room, you may be required to make an advance payment to secure the reservation.
- When you order a custom-made product, such as a wedding dress, you may be required to make an advance payment before the dress is made.
- When you hire a contractor to do work on your home, you may be required to make an advance payment before the work begins.
These examples illustrate how an advance payment is made before the goods or services are delivered or before the work is completed. It is a way for the seller or service provider to ensure that they will be paid for their work or product, and it is a way for the buyer to secure the goods or services they need.