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Simple English definitions for legal terms
out-of-pocket expenses
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A quick definition of out-of-pocket expenses:
Out-of-pocket expenses are the costs that someone has to pay for necessary things that are not already covered by an agreement. These expenses can be recovered from someone who has broken a contract, or they can be reimbursed by someone who is responsible for paying them. For example, a landlord might deduct out-of-pocket expenses from a tenant's security deposit if the tenant caused damage beyond normal wear and tear.
A more thorough explanation:
Out-of-pocket expenses
Out-of-pocket expenses refer to the money that is paid directly by a contractor, trustee, executor, administrator, or any person responsible for necessary items that are not detailed by agreement. These expenses may be recoverable from a defendant in a lawsuit for breach of contract, allowable for reimbursement by trustees, executors, or administrators, or deductible by a landlord from a tenant's security deposit for damages beyond normal wear and tear.
- A contractor may have to pay for additional materials that were not included in the original agreement.
- An executor may have to pay for funeral expenses for the deceased.
- A landlord may deduct the cost of repairing damages caused by a tenant from their security deposit.
These examples illustrate how out-of-pocket expenses can arise in different situations and how they are not covered by the original agreement or contract. They are expenses that are necessary to complete a task or fulfill a responsibility, but they are not explicitly stated in the agreement. Therefore, the person responsible for these expenses must pay for them out of their own pocket.