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Simple English definitions for legal terms
Obligor
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A quick definition of Obligor:
Term: Obligor
Definition: An obligor is someone who owes money or has a responsibility to perform a certain action. This person has given something as collateral to secure payment or performance of the obligation. In other words, they are accountable for paying back what they owe or fulfilling their obligation in some other way.
A more thorough explanation:
Definition: An obligor is a person who owes payment or other performance of an obligation that is secured by a security interest in or an agricultural lien on some collateral. The obligor may have provided property other than the collateral to secure payment or other performance of the obligation, or may be otherwise accountable for payment or other performance of the obligation.
Example 1: John takes out a loan to buy a car. The car is used as collateral for the loan, and John is the obligor. He owes payment on the loan and is responsible for making sure the loan is paid off.
Example 2: Sarah rents an apartment and signs a lease agreement. She is the obligor and owes payment for rent each month. If she fails to pay, the landlord can take legal action against her to collect the unpaid rent.
The examples illustrate how an obligor is someone who owes payment or other performance of an obligation. In both examples, John and Sarah are responsible for fulfilling their obligations, whether it's paying off a loan or paying rent. If they fail to do so, they may face legal consequences.