Legal Definitions - periodic payment

A periodic payment refers to a sum of money paid at regular, recurring intervals over a specified period. These payments are typically made according to a predetermined schedule, such as weekly, monthly, quarterly, or annually, and can involve either a fixed or variable amount. The defining characteristic is the consistent timing of the payments rather than a single, one-time transaction.

Here are some examples illustrating periodic payments:

• Mortgage Payments:

  Scenario: John and Maria purchased a home and are required to pay their bank $2,200 on the first day of every month for the next 30 years to repay their mortgage loan.

  Explanation: This is a periodic payment because John and Maria consistently make the same payment amount ($2,200) at the same regular interval (monthly, on the first day) for a defined duration (30 years). It's an ongoing financial obligation rather than a one-off transaction.

• Alimony (Spousal Support):

  Scenario: After a divorce, a court orders one spouse to pay the other $1,000 every two weeks for five years to help with their financial support.

  Explanation: This exemplifies a periodic payment because the payments are made in a fixed amount ($1,000) at regular, recurring intervals (bi-weekly) over a specific timeframe (five years), as mandated by a legal judgment.

• Equipment Lease:

  Scenario: A construction company leases a new excavator and agrees to pay the leasing company $5,000 on the 10th of each month for three years.

  Explanation: This constitutes a periodic payment because the construction company makes a consistent payment ($5,000) at a regular, recurring interval (monthly, on the 10th) for the right to use the equipment over the lease term. The payments are scheduled and repeated.