Legal Definitions - disbursement

A disbursement refers to the act of paying out money, typically from a specific fund or account, to cover expenses, settle a debt, or fulfill an obligation. It is essentially an expenditure or a payment made.

Here are some examples to illustrate the concept of a disbursement:

• Example 1: Legal Case Expenses

  A law firm representing a client in a complex lawsuit pays for various costs such as court filing fees, fees for expert witnesses, and charges for obtaining official transcripts of depositions. These payments are initially made by the law firm on behalf of the client.

  Explanation: Each of these payments—the court fees, expert witness fees, and transcript costs—are considered disbursements. The law firm is paying out money from its own accounts to cover expenses directly related to the client's case, which the client will typically be expected to reimburse later.

• Example 2: Business Operating Costs

  A small manufacturing company makes its monthly payments for raw materials purchased from suppliers, pays the salaries of its employees, and settles its utility bills for electricity and water.

  Explanation: The payments for raw materials, employee salaries, and utility bills are all disbursements. The company is paying out money from its operating funds to cover necessary expenses that allow the business to function and produce its goods.

• Example 3: Charitable Aid Distribution

  A non-profit organization dedicated to providing humanitarian aid uses donated funds to purchase medical supplies, food packages, and temporary shelter materials for communities affected by a natural disaster.

  Explanation: The payments made by the organization to acquire the medical supplies, food, and shelter materials are all disbursements. The organization is paying out money from its collected funds to fulfill its charitable mission and provide assistance to those in need.