Legal Definitions - payor

A payor is the individual or entity responsible for making a payment to satisfy a financial obligation or settle a debt. Essentially, it is the party that sends money or transfers value to another to fulfill a commitment.

• Example 1: When a customer purchases a new appliance from a department store.

  In this scenario, the customer is the payor because they are the one providing the money to the store in exchange for the appliance, thereby fulfilling their financial obligation for the purchase.

• Example 2: An insurance company issues a payment to a medical provider for services rendered to one of its policyholders.

  Here, the insurance company acts as the payor. It is making the payment to satisfy its contractual obligation under the insurance policy to cover the medical expenses of its insured individual.

• Example 3: A tenant sends their monthly rent payment to their landlord.

  The tenant is the payor in this situation. They are the individual making the payment to the landlord to fulfill their financial obligation as outlined in their lease agreement.