Legal Definitions - out-of-pocket expenses

Out-of-pocket expenses

Out-of-pocket expenses refer to the money that is paid directly by a contractor, trustee, executor, administrator, or any person responsible for necessary items that are not detailed by agreement. These expenses may be recoverable from a defendant in a lawsuit for breach of contract, allowable for reimbursement by trustees, executors, or administrators, or deductible by a landlord from a tenant's security deposit for damages beyond normal wear and tear.

• A contractor may have to pay for additional materials that were not included in the original agreement.
• An executor may have to pay for funeral expenses for the deceased.
• A landlord may deduct the cost of repairing damages caused by a tenant from their security deposit.

These examples illustrate how out-of-pocket expenses can arise in different situations and how they are not covered by the original agreement or contract. They are expenses that are necessary to complete a task or fulfill a responsibility, but they are not explicitly stated in the agreement. Therefore, the person responsible for these expenses must pay for them out of their own pocket.