Legal Definitions - morandae solutionis causa

Morandae solutionis causa is a Latin legal phrase that translates to "for the purpose of delaying payment." It describes actions or strategies undertaken with the specific intention of postponing a financial obligation or settlement.

While historically rooted, the underlying concept of intentionally delaying payment remains relevant in various modern contexts, referring to any deliberate act designed to put off an impending financial responsibility.

• Example 1: Business Invoice Processing

  A large corporation owes a smaller vendor for services rendered. Due to internal budget constraints at the end of a fiscal quarter, the corporation's accounts payable department intentionally "misplaces" the invoice, requests additional, non-essential documentation, or delays the approval process for several weeks beyond their usual turnaround time.

  How it illustrates the term: The corporation's actions are taken morandae solutionis causa because their primary objective is to delay the payment to the vendor, not due to a genuine dispute over the services or the amount owed, but to manage their own cash flow.

• Example 2: Insurance Claim Settlement

  Following a car accident, an insurance company is obligated to pay out a claim to a policyholder. However, the company's internal policy is to delay significant payouts for as long as possible to maximize interest earned on their reserves. They might repeatedly request the same documents, assign multiple adjusters to the case, or offer a low initial settlement knowing it will be rejected, thereby prolonging negotiations.

  How it illustrates the term: The insurance company's systematic delays and procedural hurdles are implemented morandae solutionis causa. Their intent is not to deny the claim outright, but to postpone the actual disbursement of funds for as long as possible.

• Example 3: Real Estate Transaction

  A buyer has agreed to purchase a property and is nearing the closing date. However, the buyer unexpectedly encounters a personal financial setback and needs more time to secure the full funds. To avoid breaching the contract, the buyer's attorney might raise minor, non-critical issues with the property title or request additional, lengthy inspections, knowing these actions will push back the closing date.

  How it illustrates the term: The buyer's attorney is acting morandae solutionis causa by creating artificial delays in the closing process. The purpose of these actions is to buy the buyer more time to arrange the necessary payment, rather than genuinely resolving a significant legal or structural issue with the property.