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Certain sum refers to the payment required to pay off a contract in full and can also be applied to negotiable instruments. It is different from a certain date, which is the deadline for payment. It is used in investment situations to establish a settlement price. The debtor may be able to claim the certain current amount, which is the total amount owed if paid on the current date.
A certain sum is a term used to describe the payment required to pay off a contract in full. A first digit is indicated in the contract setting out the arrangement between the creditor and the debtor, including any repayment terms or schedules mentioned in the provisions of the contract. The term can also be applied to any type of negotiable instrument in which a specific stated monetary value is claimed and recognized for that instrument.
It is important to note that a certain amount is different from what is known as a certain date, in that it relates to the amount owed rather than when that amount is due. The certain date is the date identified in a contract as the deadline within which the amount due can be paid in full without incurring any type of late penalty. Most contracts will identify both of these vital pieces of information at the outset. Unlike the certain date, which remains constant, the certain sum can decrease over time, assuming that the terms of the contract allow the debtor to make periodic payments on the remaining balance.
The term also has meaning in investment situations. One example is with a digital option where a financial product is traded using a fixed payment. Once the agreed price is established, it acts as a certain amount for the transaction, rather than basing the payment on the value of the underlying asset or on the product’s strike price. Once the buyer delivers the certain amount to the seller, the transaction is considered settled or completed.
One of the purposes of a certain sum is to establish a settlement price that is clearly understood and accepted by both parties. This means including the purchase price and any interest payments that may apply even if the outstanding balance is to be collected using a series of payments rather than as a lump sum. Depending on the nature of this type of contract, the debtor may be able to claim the certain current amount, which is simply the total amount owed if the debtor were to pay the entire balance on the current date, rather than continuing to make payments until the debt is withdrawn on the certain date. This is especially important to remember if the structure of the loan agreement allows you to pay off the agreement early and avoid some of the interest that would be charged if the borrower simply continued to make payments on time until a certain date.
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