Beneficium ordinis, which translates to "privilege of order," refers to a legal right that allows a surety to require a creditor to first seek payment from the principal debtor before pursuing the surety for repayment. This concept is primarily used in civil law and serves to protect the surety by ensuring that the creditor exhausts all options with the debtor before turning to the surety for payment.
This term is commonly used in civil law, particularly in cases involving surety agreements. A surety is a person or entity that agrees to be responsible for the debt or obligation of another. Beneficium ordinis helps to clarify the order in which creditors must seek payment, which can be crucial in legal disputes involving debts. Users may find templates and forms related to surety agreements on platforms like US Legal Forms, which can assist in managing such legal matters effectively.
Here are a couple of examples of abatement:
Example 1: If a contractor hires a subcontractor and the subcontractor fails to pay their suppliers, the suppliers must first pursue the subcontractor for payment before they can demand payment from the contractor, who is the surety.
Example 2: A parent who co-signs a loan for their child can invoke beneficium ordinis, requiring the lender to seek payment from the child first if the loan goes into default. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Variation |
|---|---|
| California | Beneficium ordinis is recognized, and creditors must follow the order of collection. |
| New York | Similar principles apply, but specific procedural rules may vary. |
| Texas | Beneficium ordinis is upheld, with additional protections for sureties. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Surety | A party that agrees to be responsible for another's debt. | Beneficium ordinis specifically refers to the order of payment collection. |
| Guarantor | A person who agrees to pay a debt if the primary debtor defaults. | A guarantor may not have the same rights to demand order of collection as a surety. |
If you are a surety and a creditor is seeking payment from you, remind them of your right under beneficium ordinis to first pursue the principal debtor. Consider consulting with a legal professional for advice tailored to your situation. You can also explore US Legal Forms for templates related to surety agreements to help you navigate this process.
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It is a legal right that allows a surety to require a creditor to seek payment from the principal debtor before pursuing the surety.