Also known as: payors · payer · obligor
Written by attorneys · grounded in primary & secondary sources — see below
A person who makes or is responsible for making a payment on an obligation or instrument. The term identifies the party whose performance satisfies or discharges a duty owed to another.
Priya Prasad contracted to supply components to Pacific Bank on a schedule that ended if a regulatory event closed the delivery route for more than thirty days. When an official order closed the route indefinitely, Priya stopped performance. The closure discharged her duty as payor because the contract expressly tied termination to that event.
Penelope Price owed child support under a State H order. After moving to State J she petitioned for modification there. Because the obligee and child still resided in State H at filing, Penelope remained the payor under the original order and State H retained exclusive jurisdiction to modify.
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Parker Phillips paid off a mortgage on property owned by Phoebe Park after the original lender refused to accept partial payment from her. By operation of law Parker became the payor entitled to the mortgage and the underlying obligation, preventing Phoebe from receiving an unearned windfall.
Phuong Pham sold land subject to a recorded servitude requiring maintenance of a shared driveway. The buyer, Premier Manufacturing, took title and performed the maintenance. Because the burden could more reasonably be performed by the successor than by the original obligor, Premier became the payor responsible for ongoing performance.
Pierre Poulin signed a promissory note containing a clause waiving any law protecting an obligor from personal liability. The waiver appeared in the instrument itself. Pierre remained the payor obligated to honor the note despite the protective statute he had waived.
Pinnacle Holdings agreed to deliver goods to Prism Analytics by a mountain route that became impassable after an avalanche. The closure was temporary. Pinnacle's duty as payor was suspended for the duration but revived once the route reopened because performance after the delay was not materially more burdensome.
A payor is the party who actually makes the payment that satisfies the obligation. An obligor is the party originally bound to perform. The payor may be the obligor or a third party who steps in by subrogation or agreement.
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A payor who fully satisfies a mortgage obligation owed by another receives the mortgage and the underlying debt by operation of law. The payor then steps into the position of the original mortgagee and may enforce the lien against junior interests.
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Temporary impracticability or frustration suspends the payor's duty only while the condition exists. The duty revives once the condition ends unless performance would then be materially more burdensome than originally contemplated.
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…v. Wulff, supra , at 113 (doctors who receive payments for their abortion services are "classically adverse" to government as payer); Sullivan v. Little Hunting Park , 396 U. S. 229, 237 (1969); Barrows v. Jackson, supra , at 255-256. As a vendor with standing to challenge the lawfulness of §§ 241 and 245,…