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LSDefine
Simple English definitions for legal terms
paid into court
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A quick definition of paid into court:
Paid into court: When someone owes money to someone else but doesn't know who to pay it to because of a dispute, they can give the money to the court to hold onto until the dispute is resolved. This way, the person who owes the money can fulfill their obligation without getting involved in the dispute. For example, if a contractor owes money to a hardware store but the store's owners are fighting over who owns the money, the contractor can give the money to the court to hold until the owners settle their differences.
A more thorough explanation:
Definition: Money deposited with the court by a person or entity who owes the money but doesn't know who to pay it to until a lawsuit between two other parties is decided. The person handing over the money is saying: "Here is the money. You two argue over it, but spare me the trouble and cost of the suit."
Example: A contractor buys supplies from a hardware store on credit. The store is owned by two people who have dissolved their partnership and are fighting over who owns accounts receivable, including the funds owed by the contractor. The contractor knows he owes the money for his supplies, wants to meet his obligations, and wants to get rid of the debt. So the contractor gives what he thinks he owes the hardware store to the court to hold while the two former partners settle their differences.
Explanation: In this example, the contractor owes money to the hardware store but doesn't know who to pay it to because of the dispute between the former partners. The contractor doesn't want to get involved in the legal battle and wants to make sure the money is paid to the rightful owner. So, the contractor pays the money into court, and the court will hold onto it until the dispute is resolved.