An ex gratia payment is an offer of monies extended without admitting or creating liability or obligations. This term is Latin for “from favor,” an accurate description of these kinds of payments; they are made as a favor or goodwill payment in the interests of providing compensation without creating a legal tangle. When people accept ex gratia payments, they do so with the understanding that the person providing the payment is not creating a legal relationship, admitting fault for something, or accepting an obligation.
One common example of an ex gratia payment is an extra payment made to an employee when she is laid off. A company may offer benefits above those mandated by law as an expression of thanks for service or to compensate for the job loss. The company is not admitting any wrongdoing by offering this expression of goodwill, and the employee could chose to turn the payment down if there was a compelling reason to do so.
Governments sometimes provide compensation in the wake of accidents and disasters in the form of such payments. The government is not indicating that it will provide future support for people, nor is it claiming responsibility for the events. The funds are offered as an ex gratia payment to compensate people for their unpleasant experiences. Accepting such payments doesn't mean people cannot sue organizations or individuals involved.
Depending on the nature of an ex gratia payment, the money may come with a legal document people must sign. The document explains the terms of the payment, noting that the offer of money, whether it is accepted or not, does not constitute the creation of any kind of legal relationship. People should read the documentation carefully, as accepting the money may trigger clauses such as not discussing a situation publicly. If a contract is confusing or people have questions, they can request a copy for review and may take it to an attorney for a closer inspection before making a decision about what to do.
The concept of ex gratia also comes up in the sense of other legal situations where people do something voluntarily, often in the interests of benevolence or goodwill. In addition to an ex gratia payment, people can also provide information without being compelled to, or may offer services without being obliged. A phone provider, for example, might waive fees for people experiencing hardship, even though it is not required to do this.
