Paid Into Court

Dictionary Definition

adj. referring to money deposited with the clerk of the court by a person or entity who knows that the money is owed but does not know to whom they should pay it until the outcome of a lawsuit between two other parties is decided.

In short, the party handing over the money is saying: “Here is the money. You two argue over it, but spare me the trouble and cost of the suit.” Example: A contractor buys supplies from a hardware store on credit. The store is owned by two people who have dissolved their partnership and are fighting over who owns accounts receivable, including the funds owed by the contractor. The contractor knows he owes them money for his supplies, wants to meet his obligations, and wants to get rid of the debt. So the contractor gives what he thinks he owes the hardware store to the court to hold while the two former partners settle their differences.