What does it mean to obligate funds?

obligate is defined as to bind yourself to pay or perform a thing you have promised. In a simple example, you might write a check for a friend to pay for an item you purchased for them. Though the money is technically theirs, you have obligated it to them, and they will be expecting the check to arrive. In the same way, the funds for your subcontractor to pay for supplies must be obligated to them before they receive payment.

What does obligate funds mean?

obligated funds refers to when a lender requires the borrower to pay a certain amount of money upfront for a loan or other type of credit. Obligations must be paid in full and on time, including interest and any other fees. Typically, the lender will place restrictions on how the funds can be used, such as requiring the funds to be used for a certain purpose.

What does it mean to obligate funds in a contract?

A contract that requires one party to pay a sum of money to another party is known as a financial obligation. The party who is obligated to pay the money must do so regardless of whether they received all of the benefits of the agreement. The person who is obligated is known as the payor. The person who receives the funds is known as the payee.

What is it mean to obligate funds in a contract?

Obligations are promises that one party makes to another. Obligations are meant to create a binding contract between the parties. Obligations can be written into the terms of a contract or they may be created by operation of law. Obligations can also arise by virtue of the terms of a previous agreement, such as a loan agreement.

What does the term obligate funds mean?

Obligate is the term used when a company says that it will use a particular amount of money to pay for a project or activity. Obligate funds is a common term when discussing capital expenditures, for example, or expenditures made for the development and expansion of a company. Obligations can also be made for activities or projects that are ongoing, such as paying for the costs of labor and materials for repairs.