Legal Definitions - indefinite payment

An indefinite payment refers to a financial transfer where one or more key aspects—such as the exact amount, the specific timing, or the precise conditions under which it will be made—are not fixed or predetermined at the time the obligation is created. Instead, these details are left open to future determination, often depending on contingent events, discretionary decisions, or ongoing assessments.

Here are some examples to illustrate this concept:

• Example 1: Performance-Based Bonus

  A company's employment contract states that an executive will receive an "annual performance bonus to be determined by the Board of Directors based on overall company success and market conditions." There is no specific formula, minimum amount, or guaranteed payment schedule outlined in the contract.

  Explanation: This is an indefinite payment because the exact amount of the bonus is not fixed at the time the contract is signed. It is contingent upon future, unspecified factors (company success, market conditions) and the discretionary decision of the Board, making the payment uncertain until it is actually determined and awarded.

• Example 2: Future Medical Expenses in a Settlement

  In a personal injury lawsuit, a settlement agreement stipulates that the defendant will cover the plaintiff's "reasonable and necessary future medical expenses" related to the injury, without specifying a total monetary cap or a fixed payment schedule. The costs will be paid as they accrue over time based on actual treatment.

  Explanation: This constitutes an indefinite payment because the precise total amount and the timing of individual payments for future medical care are not known at the time of the settlement. They are contingent upon the plaintiff's ongoing medical needs and the actual costs incurred, which are subject to future determination.

• Example 3: Discretionary Trust Distributions

  A trust document establishes a discretionary trust, allowing the trustee to distribute funds to a beneficiary "as needed for their education, health, and general welfare," without setting a fixed annual amount or a specific schedule for these distributions. The trustee has full authority to decide when and how much to pay based on their assessment of the beneficiary's circumstances.

  Explanation: This is an indefinite payment because both the amount and the timing of the distributions are not fixed. They are left to the trustee's discretion, based on their assessment of the beneficiary's future needs, making the payments uncertain until the trustee makes a decision to distribute funds.