Obligee

An obligee is an individual or entity to whom an obligation is owed, typically under a contract, bond, or other legally binding agreement. This person or organization is entitled to receive something – money, services, or goods – as stipulated in the agreement from the obligor. The obligee holds the right to enforce the obligation and seek remedies if the obligor fails to fulfill their commitment. Their position is one of beneficiary, creditor, or promisee, depending on the nature of the agreement. Protection of the obligee's rights and interests forms the core of contract law and other legal frameworks governing financial and commercial transactions, ensuring fairness and accountability.

Obligee meaning with examples

• In a loan agreement, the bank is the obligee, entitled to receive repayment of the principal and interest from the borrower (the obligor). The bank can take legal action if the borrower defaults on the loan payments, protecting its financial interests through enforcement of the agreement.
• Under a construction contract, the property owner is the obligee, receiving a finished building or renovations from the contractor (the obligor). The obligee has the right to ensure the work meets specified standards and is completed on time, with recourse for breach of contract.
• In the case of a surety bond, the obligee is the party protected by the bond against potential losses caused by the obligor's failure to perform, and can seek compensation. If a contractor doesn't meet agreed obligations, the obligee files a claim against the bond.
• When purchasing goods with a payment plan, the store, or financing company is the obligee who is due periodic payments from the consumer (the obligor). The obligee has the right to seize the goods if the payments are not met by the obligor.