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Simple English definitions for legal terms
simple-contract debt
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A quick definition of simple-contract debt:
Simple-contract debt is a type of debt that is not recorded or sealed, and can be either written or spoken. It is an agreement between two parties where one owes the other a specific amount of money. This type of debt is different from other types of debt, such as secured debt, which is backed by collateral, or debt of record, which is evidenced by a court record. Simple-contract debt can be created by any type of agreement, whether it is written or verbal.A more thorough explanation:
Simple-contract debt is a type of debt that is either oral or written but is not of record and not under seal. It refers to a liability on a claim, a specific sum of money due by agreement or otherwise.
Examples of simple-contract debt include:
- A loan between friends that is not documented
- A credit card debt that is not secured by collateral
- An agreement to pay for services rendered
These examples illustrate how simple-contract debt can arise from informal agreements between individuals or entities. Unlike debts of record or debts by special contract, simple-contract debts are not backed by a formal legal document.