Legal Definitions - owe

To owe means to have a legal obligation to pay money or funds to another individual, company, or entity. This obligation exists from the moment the duty arises, even if the specific date for the payment to be made has not yet arrived.

Here are some examples to illustrate this concept:

• Example 1: Mortgage Payments

  Imagine Sarah purchased a house with a mortgage. Every month, she has a legal duty to pay a certain amount to the bank. Even on the first day of the month, before her payment is officially due on the fifteenth, Sarah owes the bank that month's mortgage payment. The obligation exists throughout the month, even though the funds are not yet "payable" until the due date.

• Example 2: Contractor Services

  A homeowner hires a contractor to remodel their kitchen. After the work is completed, the contractor sends an invoice for $15,000 with a payment term of 30 days. From the moment the invoice is issued, the homeowner owes the contractor $15,000. While the homeowner has 30 days before the payment is technically "due," the legal obligation to pay that specific amount has already been established.

• Example 3: Credit Card Balance

  David uses his credit card to buy groceries and other necessities throughout the month, accumulating a balance of $500. By the end of the billing cycle, he owes the credit card company $500. Even though his payment due date might be several weeks away, and he might only be required to pay a minimum amount, the full $500 is the amount he is legally obligated to pay back to the company.