contracts

Party of the first part indicates the party mentioned first in documents such as deeds and contracts in order to avoid repeating their names. The other party is referred to as the “party of the second part”. 

Party of the second part indicates the party mentioned second in documents such as deeds and contracts in order to avoid repeating their names. The first party is referred to as the “party of the first part”.

Patent ambiguity is a type of ambiguity that occurs where a document is unclear within the text itself. For example, if a contract stated in one place that the goods were to be delivered by seller at the place of business and stated the goods were to be picked up by buyer at seller’s place of business in another, this would be a patent ambiguity because its is unclear on the terms of the contract where delivery is to occur. 

A flaw, dangerous condition, or other deficiency which is reasonably apparent to the ordinarily prudent person. (Contrast with a latent defect). The California Code of Civil Procedure, § 337.1(e) defines patent defect as “a deficiency which is apparent by reasonable inspection.” In the context of negligence, patent defects may exonerate a party from liability.

A person to whom a promissory note, check, or bill of exchange is made payable. The payee is the recipient of the payment.  For example, when writing a check, the person who the check is made out to is the payee.  When paying a bill, the company such as the utility company who is being paid is the payee. 

Payment in due course is the payment by a debtor on a negotiable instrument which discharges the negotiable instrument, even though the payment is made on or after the maturity date of the negotiable instrument.

In common parlance, payment in full means satisfying everything that a debtor owes on a debt or other monetary obligation.

Payor is used interchangeably with “payer”.  The person making the payment, satisfying the claim, or settling a financial obligation.  For example, the person writing a check is the payor, or an employer paying their worker is the payor.

[Last reviewed in August of 2020 by the Wex Definitions Team]