Legal Definitions - payable

In legal and financial contexts, the term payable refers to a sum of money that is owed or is expected to be paid. It signifies a financial obligation or a commitment to make a payment, regardless of whether the payment is immediately due or will become due at a future date. Essentially, if an amount is "payable," there is an existing responsibility or expectation for that money to be transferred from one party to another.

Here are some examples illustrating the concept of "payable":

• Invoice for Services Rendered:

  Imagine a freelance graphic designer completes a logo design project for a client and sends an invoice for $1,500, stating "Payment due in 30 days." From the moment the invoice is issued, the $1,500 is payable by the client to the graphic designer. While the actual payment isn't due for a month, the obligation to pay exists immediately, signifying a financial commitment that is expected to be fulfilled.

• Future Interest on a Loan:

  A business takes out a loan with an agreement to pay interest quarterly. Even though the interest payment for the current quarter won't be due until the end of that quarter, the interest that accrues daily is considered payable. It's a sum that "is to be paid" according to the loan agreement, even if the specific payment date hasn't arrived yet.

• Employee Bonus Upon Performance:

  An employee's contract states they will receive a performance bonus of $5,000 if they exceed their sales targets by 20% in a given year. Once the employee achieves this target and the company verifies it, the $5,000 bonus becomes payable. Although the company might process the payment on the next payroll cycle, the employee now has a legal right to that money, and the company has a clear obligation to pay it.