Legal Definitions - causa debendi

Causa debendi is a historical legal term derived from Latin, meaning "the grounds of debt" or "the reason for an obligation." It refers to the underlying cause, justification, or specific event that creates a debt or a duty to perform. In essence, it answers the question of why a particular debt or obligation exists, rather than simply stating that it does.

Here are some examples illustrating the concept of causa debendi:

• Loan Agreement: Imagine a situation where a small business owner borrows $10,000 from a bank to purchase new equipment. The causa debendi for the business owner's obligation to repay the $10,000 is the act of the bank providing the loan funds. The debt arises directly from the bank's action of lending the money, which creates the corresponding duty for the business owner to return it according to the agreed terms.
• Purchase of Goods on Credit: Consider a restaurant owner who receives a large delivery of fresh produce from a supplier, with an agreement to pay the invoice within 30 days. The causa debendi for the restaurant owner's debt to the supplier is the supplier's act of delivering the produce. The obligation to pay is directly linked to and justified by the receipt of the goods.
• Performance of a Service: Suppose a homeowner hires a landscaper to redesign their garden, agreeing to pay upon completion of the work. Once the landscaper successfully finishes the garden redesign as per the agreement, the causa debendi for the homeowner's obligation to pay the agreed fee is the landscaper's completion of the service. The debt is incurred because the landscaper fulfilled their part of the contract.