What is the purpose of an interpleader?

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An interpleader is a legal procedure that allows a party holding property or money to initiate a lawsuit to determine the rightful owner among two or more claimants. The primary purpose is to resolve disputes where multiple parties assert claims over the same asset or money, ensuring that the stakeholder can avoid liability for paying the wrong claimant. By utilizing interpleader, the court can adjudicate the various claims and provide a single resolution, safeguarding the stakeholder from the risk of double liability.

This process is particularly important when the stakeholder cannot determine which party has the valid claim and wants to avoid the legal risk of distributing the property or funds incorrectly. In this context, the interpleader serves to clarify and settle competing rights, making option B the most accurate representation of its primary purpose. Other options, such as enforcing contracts or settling matters through arbitration, do not align with the specific function of interpleader.

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