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LSDefine
Simple English definitions for legal terms
composition
Read a random definition: Subchapter S corporation
A quick definition of composition:
Composition is an agreement between someone who owes money and two or more people they owe money to. The agreement is that the person who owes money will pay less than what they owe to each creditor, and in return, the creditors will forgive the rest of the debt. This is called a composition with creditors. The person who owes money is then free from their debts to those creditors. Sometimes, the person who owes money will have to pay something as part of the agreement. In the past, composition was also used as a way to make up for hurting someone, by paying them money or giving them something valuable.
A more thorough explanation:
Definition: Composition refers to an agreement between a debtor and two or more creditors to settle an obligation for a lesser amount. It is an agreement among the debtor and creditors that the debtor will pay the creditors less than their full claims in full satisfaction of their claims.
For example, if a debtor owes $10,000 to two creditors, they may agree to pay $6,000 in total to settle the debt. Through the performance of this agreement, the debtor is discharged in full for the debts of the participating creditors.
Composition can also refer to the compensation paid as part of such an agreement.
In history, composition was also used to refer to a payment of money or chattels as satisfaction for an injury. In early societies, a composition with the injured party was recognized as a way to deter acts of revenge by the injured party.
For example, if someone caused an injury to another person, they could pay a composition to the injured party as a way to avoid retaliation or further conflict.
Overall, composition is an agreement between parties to settle an obligation for a lesser amount, and it can be used in various contexts such as debt settlement or injury compensation.