Legal Definitions - ex gratia payment

An ex gratia payment is a payment that is not legally required. This means that it is a payment that is made voluntarily, without any legal obligation to do so. One common example of an ex gratia payment is an insurance payment that is not required to be made under an insurance policy.

For instance, if an insurance policy does not cover a particular type of damage, but the insurance company decides to make a payment to the policyholder anyway, that payment would be considered an ex gratia payment. Another example of an ex gratia payment might be a payment made by a company to a customer who has experienced a problem with a product, even though the company is not legally required to make such a payment.

Ex gratia payments are often made as a gesture of goodwill, to show that a company or organization is willing to go above and beyond what is legally required in order to help someone who has been affected by a particular situation. While ex gratia payments are not legally required, they can be an important way for companies and organizations to build trust and goodwill with their customers or clients.