Payee Definition:

The person to whom payment is addressed or given.

In family law, the term usually refers to the recipient, the person who receives or to whom support or maintenance is owed.

In commercial law, the term refers to the person to whom a bill of exchange is made payable:

"A check is a draft signed by the party to be charged (the drawer), ordering a bank (the drawee), to pay a specified sum, on demand, to a party (the payee)."¹

On a regular cheque or check, the space preceded with the words "pay to the order of", identifies the payee.

As Justice Samuel Bufford of the United States Bankruptcy Court wrote in the 2000 case, In re McMullen Oil:

"A check typically involves three parties, (1) the drawer who writes the check, (2) the payee, to whose order the check is made out, and (3) the drawee or payor bank, the bank which has the drawer's checking account from which the check is to be paid.

"In form, a check is an order to the drawee bank to pay the face amount of the check to the payee. After receiving the check, the payee typically indorses it on the back in the payee's own name, and then deposits it in the payee's account in a different bank."

REFERENCES:

• In re McMullen Oil Co., 251 BR 558 - (2000)
• Union Bank of Benton v. First Nat. Bank, 621 F. 2d 790 (Justice Politz, United States Court of Appeals, 1980 - NOTE 1)