Ex-gratia payment is made where there is

An ex-gratia payment is made where there is no legal liability obligation. It is a payment made voluntarily, usually as a gesture of goodwill, by a person or organization to someone who has suffered a loss or harm. For example, if a customer of a company experiences a problem due to the company's mistake or oversight, and the company decides to offer compensation as a goodwill gesture, it would be considered an ex-gratia payment. The company is not legally required to offer this compensation, but is doing so to maintain a positive relationship with the customer. Ex-gratia payments may also be made by insurance companies in certain circumstances. For example, if an insurance claim is rejected due to an exclusion in the policy wording, but the insurer decides to make a payment to the policyholder as a gesture of goodwill, it would be considered an ex-gratia payment. In summary, an ex-gratia payment is a payment made voluntarily, without any legal obligation, usually as a gesture of goodwill. It is typically made in situations where a person or organization wishes to maintain a positive relationship with someone who has suffered a loss or harm.