Legal Definitions - pro tanto

The legal term pro tanto is a Latin phrase meaning "to that extent" or "for so much." In legal contexts, it signifies that something is valid, satisfied, or applies only partially, up to a certain amount or degree, rather than entirely or completely.

Here are some examples to illustrate how pro tanto is used:

• Partial Debt Satisfaction: Imagine a small business owes a supplier $20,000 for a large order of materials. Due to unexpected financial difficulties, the business can only pay $12,000 immediately. If the supplier accepts this payment, the debt is considered satisfied pro tanto by $12,000. This means that while the $12,000 portion of the debt has been paid, the remaining $8,000 is still outstanding and legally owed.

• Limited Contract Performance: Consider a situation where a construction company is hired to build a new wing for a hospital, which includes three distinct phases: foundation, structural work, and interior finishing. If the company completes the foundation and structural work but, due to unforeseen circumstances, cannot complete the interior finishing, the hospital might agree to pay for the completed phases. The contract would be fulfilled pro tanto for the work that was successfully delivered, meaning payment is made only for the completed portions, not the entire original scope.

• Insurance Claim Payout: A homeowner files an insurance claim for $75,000 after a fire damages their property. However, their specific insurance policy has a maximum coverage limit of $50,000 for fire damage to the structure. The insurance company pays out $50,000. This payment satisfies the homeowner's claim pro tanto. The insurance company has fulfilled its obligation to the extent of the policy's coverage, even though the actual damages were higher than the payout amount.