Ex gratia
Insurance Policyholder Taxation Manual, published by HM Revenue & Customs on 19 March 2016, defines ex gratia as: ‘without legal obligation.’
An ex gratia payment is a payment made by one party to another without the payer acknowledging any legal obligation to do so. This type of payment is typically made voluntarily and as a gesture of goodwill or to maintain good relations, rather than as a result of a contractual requirement or legal liability. Ex gratia payments are often made to address a dispute or issue without admitting fault or liability. They may also preserve a business relationship, smooth over a disagreement, or assist a party facing financial difficulty, without setting a legal precedent.
In practice, an ex gratia payment might be made in situations such as:
- Compensating a contractor for delays caused by unforeseeable events, even though the contract does not require such compensation.
- Providing financial assistance to a subcontractor struggling to meet deadlines due to cash flow issues, without the main contractor admitting any fault.
- Settling a potential claim for defects or damages without the paying party admitting that the defects or damages were their responsibility.
The payer does not accept any legal responsibility or obligation by making the payment. It is explicitly understood that the payment is made without any admission of liability. Even though the payment is voluntary, it is typically documented to ensure clarity and avoid misunderstandings. This can include a written statement confirming that the payment is ex gratia and does not constitute an admission of liability.
Ex gratia payments are often more cost-effective and less adversarial than more formal proceedings.
[edit] Related articles on Designing Buildings
Featured articles and news
Key points for construction at a glance with industry reactions.
Functionality, visibility and sustainability
The simpler approach to specification.
Architects, architecture, buildings, and inspiration in film
The close ties between makers and the movies, with our long list of suggested viewing.
SELECT three-point plan for action issued to MSPs
Call for Scottish regulation, green skills and recognition of electrotechnical industry as part of a manifesto for Scottish Parliamentary elections.
UCEM becomes the University of the Built Environment
Major milestone in its 106-year history, follows recent merger with London School of Architecture (LSE).
Professional practical experience for Architects in training
The long process to transform the nature of education and professional practical experience in the Architecture profession following recent reports.
A people-first approach to retrofit
Moving away from the destructive paradigm of fabric-first.
International Electrician Day, 10 June 2025
Celebrating the role of electrical engineers from André-Marie Amperè, today and for the future.
New guide for clients launched at Houses of Parliament
'There has never been a more important time for clients to step up and ...ask the right questions'
The impact of recycled slate tiles
Innovation across the decades.
EPC changes for existing buildings
Changes and their context as the new RdSAP methodology comes into use from 15 June.
Skills England publishes Sector skills needs assessments
Priority areas relating to the built environment highlighted and described in brief.
BSRIA HVAC Market Watch - May 2025 Edition
Heat Pump Market Outlook: Policy, Performance & Refrigerant Trends for 2025–2028.
Committing to EDI in construction with CIOB
Built Environment professional bodies deepen commitment to EDI with two new signatories: CIAT and CICES.
Government Grenfell progress report at a glance
Line by line recomendation overview, with links to more details.
An engaging and lively review of his professional life.
Sustainable heating for listed buildings
A problem that needs to be approached intelligently.
50th Golden anniversary ECA Edmundson apprentice award
Deadline for entries has been extended to Friday 27 June, so don't miss out!
CIAT at the London Festival of Architecture
Designing for Everyone: Breaking Barriers in Inclusive Architecture.
Mixed reactions to apprenticeship and skills reform 2025
A 'welcome shift' for some and a 'backwards step' for others.