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abandonment  To intentionally give up possession or claim to property with the intent of relinquishment of any ownership or claim.
abatement  An action of stopping or removing.
ab initio  From the beginning.
abstract of title  A summary of the conveyances, transfers, and other facts relied on as evidence of title, together with all such facts appearing of record that may impair its validity.
abuse of process  An intentional tort designed to protect against the initiation of legal proceedings for a primary purpose other than the one for which such proceedings were designed.
acceleration  The shortening of the time for the performance of a contract or the payment of a note by the operation of some provision in the contract or note itself.
acceptance  The actual or implied receipt and retention of that which is tendered or offered.
accession  The acquisition of property by its incorporation or union with other property.
accommodation paper  A negotiable instrument signed without consideration by a party as acceptor, drawer, or indorser for the purpose of enabling the payee to obtain credit.
accommodation party  A person who signs a negotiable instrument for the purpose of adding his name and liability to another party to the instrument.
accord and satisfaction  A legally binding agreement to settle a disputed claim for a definite amount.
account stated  An account that has been rendered by one to another and which purports to state the true balance due and that balance is either expressly or impliedly admitted to be due by the debtor.
acquit  To set free or judicially to discharge from an accusation; to release from a debt, duty, obligation, charge, or suspicion of guilt.
actionable  Capable of being remedied by a legal action or claim.
act of God  An occurrence resulting exclusively from natural forces that could not have been prevented or whose effect could not have been avoided by care or foresight.
act of state doctrine  A doctrine of international law that no nation is permitted to judge the act of another nation committed within its own boundaries.
adjudge  To give judgment; to decide.
adjudicate  To adjudge; to settle by judicial decree.
ad litem  During the pendency of the action or proceeding.
administrator  The personal representative appointed by a probate court to settle the estate of a deceased person who died intestate (without leaving a valid will).
adoption  In corporation law, a corporation's acceptance of a preincorporation contract by action of its board of directors, by which the corporation becomes liable on the contract.
advance directive  A written document such as a living will or durable power of attorney that directs others how future health care decisions should be made in the event that the individual becomes incapacitated.
adverse possession  Open and notorious possession of real property over a given length of time that denies ownership in any other claimant.
advised letter of credit  The seller's bank acts as the seller's agent to collect against the letter of credit issued by the buyer's bank.
affidavit  A signed writing containing statements of fact to whose accuracy the signing party has sworn. Used in a variety of judicial proceedings, including the motion for summary judgment.
affirm  To confirm or uphold a former judgment or order of a court. Appellate courts, for instance, may affirm the decisions of lower courts.
after-acquired property  Property of the debtor that is obtained after a security interest in the debtor's property has been created.
agency  A legal relationship in which an agent acts under the direction of a principal for the principal's benefit. Also used to refer to government regulatory bodies of all kinds.
agent  One who acts under the direction of a principal for the principal's benefit in a legal relationship known as agency. See principal.
aggregate theory  In partnership law, the view that there is no distinction between a partnership and the partners who own it. See entity theory.
aggrieved  One whose legal rights have been invaded by the act of another. Also, one whose pecuniary interest is directly affected by a judgment, or whose right of property may be divested by an action.
alienation  The voluntary act or acts by which one person transfers his or her own property to another.
alien corporation  A corporation incorporated in one country that is doing business in another country. See foreign corporation.
allegation  A statement of a party to an action in a declaration or pleading of what the party intends to prove.
allege  To assert a statement of fact.
alteration  An addition or change in a document.
alter ego  Other self. In corporation law, a doctrine that permits a court to pierce a corporation's veil and to hold a shareholder liable for the actions of a corporation dominated by the shareholder.
alternative dispute resolution (ADR)  A general name applied to the many nonjudicial means of settling private disputes.
amortize  To provide for the payment of a debt by creating a sinking fund or paying in installments.
ancillary  Auxiliary to. An ancillary receiver is a receiver who has been appointed in aid of, and in subordination to, the primary receiver.
ancillary covenant not to compete  A promise that is ancillary to (part of) a valid contract whereby one party to a contract agrees not to compete with the other party for a specified time and within a specified location. Also called noncompetition clause.
answer  The pleading of a defendant in which he or she may deny any or all the facts set out in the plaintiff 's declaration or complaint.
anticipatory breach  A contracting party's indication before the time for performance that he cannot or will not perform the contract.
appearance  The first act of the defendant in court.
appellant  The party making an appeal.
appellate jurisdiction  Jurisdiction to revise or correct the work of a subordinate court.
appellee  A party against whom a favorable court decision is appealed. May be called the respondent in some jurisdictions.
applicant  A petitioner; one who files a petition or application.
appurtenance  An accessory; something that belongs to another thing.
arbitrate  To submit some disputed matter to selected persons and to accept their decision or award as a substitute for the decision of a judicial tribunal.
argument  The discussion by counsel for the respective parties of their contentions on the law and the facts of the case being tried in order to aid the jury in arriving at a correct and just conclusion.
articles of incorporation  A document that must be filed with a secretary of state to create a corporation. Usually, it includes the basic rights and responsibilities of the corporation and the shareholders.
artisan's lien  A common law possessory security interest arising out of the improvement of property by one skilled in some mechanical art or craft; the lien entitles the improver of the property to retain possession in order to secure the agreedon price or the value of the work performed.
assault  An intentional tort that prohibits any attempt or offer to cause harmful or offensive contact with another if it results in a well-grounded apprehension of imminent battery in the mind of the threatened person.
assent  To give or express one's concurrence or approval of something done.
assignable  Capable of being lawfully assigned or transferred; transferable; negotiable. Also, capable of being specified or pointed out as an assignable error.
assignee  A person to whom an assignment is made.
assignment  A transfer of property or some right or interest.
assignor  The maker of an assignment.
assumption of risk  A traditional defense to negligence liability based on the argument that the plaintiff voluntarily exposed himself to a known danger created by the defendant's negligence.
assurance  To provide confidence or to inform positively.
attachment  In general, the process of taking a person's property under an appropriate judicial order by an appropriate officer of the court. Used for a variety of purposes, including the acquisition of jurisdiction over the property seized and the securing of property that may be used to satisfy a debt.
attest  To bear witness to; to affirm; to be true or genuine.
attorney-in-fact  An agent who is given express, written authorization by his principal to do a particular act or series of acts on behalf of the principal.
at will  See employment at will or partnership at will.
audit committee  In corporation law, a committee of the board that recommends and supervises the public accountant who audits the corporation's financial records.
authentication  Such official attestation of a written instrument as will render it legally admissible in evidence.
authority  In agency law, an agent's ability to affect his principal's legal relations with third parties. Also used to refer to an actor's legal power or ability to do something. In addition, sometimes used to refer to a statute, case, or other legal source that justifies a particular result.
authorized shares  Shares that a corporation is empowered to issue by its articles of incorporation.
automatic stay  Under the Bankruptcy Act, the suspension of all litigation against the debtor and his property, which is triggered by the filing of a bankruptcy petition.
averment  A statement of fact made in a pleading.
avoid  To nullify a contractual obligation.
bad faith  A person's actual intent to mislead or deceive another; an intent to take an unfair and unethical advantage of another.
bailee  The person to whom a bailment is made.
bailment  The transfer of personal property by its owner to another person with the understanding that the property will be returned to the owner in the future.
bailor  The owner of bailed property; the one who delivers personal property to another to be held in bailment.
bankruptcy  The state of a person who is unable to pay his or her debts without respect to time; one whose liabilities exceed his or her assets.
bar  As a collective noun, those persons who are admitted to practice law, members of the bar. The court itself. A plea or defense asserted by a defendant that is sufficient to destroy a plaintiff 's action.
battery  An intentional tort that prohibits the harmful or offensive touching of another without his consent.
bearer  A person in possession of a negotiable instrument that is payable to him, his order, or to whoever is in possession of the instrument.
bench  Generally used as a synonym for the term court or the judges of a court.
beneficiary  The person for whose benefit an insurance policy, trust, will, or contract is established. In the case of a contract, the beneficiary is called a third-party beneficiary.
bequest  In a will, a gift of personal property or money. Also called a legacy.
bid  To make an offer at an auction or at a judicial sale. As a noun, an offer.
bilateral contract  A contract in which the promise of one of the parties forms the consideration for the promise of the other.
bill of exchange  An unconditional order in writing by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.
bill of lading  A written acknowledgment of the receipt of goods to be transported to a designated place and delivery to a named person or to his or her order.
bill of sale  A written agreement by which one person assigns or transfers interests or rights in personal property to another.
binder  Also called a binding slip. A brief memorandum or agreement issued by an insurer as a temporary policy for the convenience of all the parties, constituting a present insurance in the amount specified, to continue in force until the execution of a formal policy.
blue sky laws  The popular name for state statutes that regulate securities transactions.
bona fide  Made honestly and in good faith; genuine.
bona fide purchaser  An innocent buyer for valuable consideration who purchases goods without notice of any defects in the title of the goods acquired.
bond  A long-term debt security that is secured by collateral.
bonus shares  Also called bonus stock. Shares issued for no lawful consideration. See discount shares and watered shares.
breaking bulk  The division or separation of the contents of a package or container.
brief  A statement of a party's case or legal arguments, usually prepared by an attorney. Often used to support some of the motions described in Chapter 2, and also used to make legal arguments before appellate courts. Also, an abridgement of a reported case.
broker  An agent who bargains or carries on negotiations in behalf of the principal as an intermediary between the latter and third persons in transacting business relative to the acquisition of contractual rights, or to the sale or purchase of property the custody of which is not entrusted to him or her for the purpose of discharging the agency.
bulk transfer  The sale or transfer of a major part of the stock of goods of a merchant at one time and not in the ordinary course of business.
burden of proof  Used to refer both to the necessity or obligation of proving the facts needed to support a party's claim, and the persuasiveness of the evidence used to do so. Regarding the second sense of the term, the usual burden of proof in a civil case is a preponderance of the evidence; in a criminal case, it is proof beyond a reasonable doubt.
business judgment rule  A rule protecting business managers from liability for making bad decisions when they have acted prudently and in good faith.
buy-and-sell agreement  A share transfer restriction compelling a shareholder to sell his shares to the other shareholders or the corporation and obligating the other shareholders or the corporation to buy the shareholder's shares.
buyer in ordinary course of business  A person who, in good faith and without knowledge that the sale to him is in violation of a third party's ownership rights or security interest in the goods, buys in ordinary course from a person who is in the business of selling goods of that kind.
bylaws  In corporation law, a document that supplements the articles of incorporation and contains less important rights, powers, and responsibilities of a corporation and its shareholders, officers, and directors.
call  See redemption. Also, a type of option permitting a person to buy a fixed number of securities at a fixed price at a specified time. Compare put.
canceled shares  Previously outstanding shares repurchased by a corporation and canceled by it; such shares no longer exist.
cancellation  The act of crossing out a writing. The operation of destroying a written instrument.
C&F  The price of the goods includes the cost of the goods plus the freight to the named destination.
capacity  The ability to incur legal obligations and acquire legal rights.
capital  Contributions of money and other property to a business made by the owners of the business.
capital stock  See stated capital.
capital surplus  Also called additional paid in capital. A balance sheet account; the portion of shareholders' contributions exceeding the par or stated value of shares.
case law  The law extracted from decided cases.
cashier's check  A draft (including a check) drawn by a bank on itself and accepted by the act of issuance.
causa mortis  In contemplation of approaching death.
cause of action  A legal rule giving the plaintiff the right to obtain some legal relief once certain factual elements are proven. Often used synonymously with the terms claim or theory of recovery.
caveat emptor  "Let the buyer beware."
caveat venditor  "Let the seller beware."
certificate of deposit  An acknowledgment by a bank of the receipt of money with an engagement to pay it back.
certificate of limited partnership  A document that must be filed with a secretary of state to create a limited partnership.
certification  The return of a writ; a formal attestation of a matter of fact; the appropriate marking of a certified check.
certified check  A check that has been accepted by the drawee bank and has been so marked or certified that it indicates such acceptance.
chancellor  A judge of a court of chancery.
chancery  Equity or a court of equity.
charge  The legal instructions that a judge gives a jury before the jury begins its deliberations. In the prosecution of a crime, to formally accuse the offender or charge him with the crime.
charging order  A court's order granting rights in a partner's transferable interest to a personal creditor of the partner; a creditor with a charging order is entitled to the partner's share of partnership distributions.
charter  An instrument or authority from the sovereign power bestowing the right or power to do business under the corporate form of organization. Also, the organic law of a city or town, and representing a portion of the statute law of the state.
chattel  An article of tangible property other than land.
chattel mortgage  An instrument whereby the owner of chattels transfers the title to such property to another as security for the performance of an obligation subject to be defeated on the performance of the obligation. Under the UCC, called merely a security interest.
chattel paper  Written documents that evidence both an obligation to pay money and a security interest in particular goods.
check  A written order on a bank or banker payable on demand to the person named or his order or bearer and drawn by virtue of credits due the drawer from the bank created by money deposited with the bank.
chose in action  A personal right not reduced to possession but recoverable by a suit at law.
CIF  An abbreviation for cost, freight, and insurance, used in mercantile transactions, especially in import transactions.
citation of authorities  The reference to legal authorities such as reported cases or treatises to support propositions advanced.
civil action  An action brought to enforce a civil right; in contrast to a criminal action.
civil law  The body of law applicable to lawsuits involving two private parties.
class action  An action brought on behalf of the plaintiff and others similarly situated.
close corporation  A corporation with few shareholders generally having a close personal relationship to each other and participating in the management of the business.
COD  Cash on delivery. When goods are delivered to a carrier for a cash on delivery shipment, the carrier must not deliver without receiving payment of the amount due.
code  A system of law; a systematic and complete body of law.
codicil  Some addition to or qualification of one's last will and testament.
collateral  Property put up to secure the performance of a promise, so that if the promisor fails to perform as promised, the creditor may look to the property to make him whole.
collateral attack  An attempt to impeach a decree, a judgment, or other official act in a proceeding that has not been instituted for the express purpose of correcting or annulling or modifying the decree, judgment, or official act.
collateral contract  A contract in which one person agrees to pay the debt of another if the principal debtor fails to pay. See guaranty.
comaker  A person who with another or others signs a negotiable instrument on its face and thereby becomes primarily liable for its payment.
commercial impracticability  The standards used by the UCC, replacing the common law doctrine of impossibility, to define when a party is relieved of his or her contract obligations because of the occurrence of unforeseeable, external events beyond his or her control.
commercial law  The law that relates to the rights of property and persons engaged in trade or commerce.
commercial paper  Negotiable paper such as promissory notes, drafts, and checks that provides for the payment of money and can readily be transferred to other parties.
commercial unit  Under the UCC, any unit of goods that is treated by commercial usage as a single whole. It may, for example, be a single article or a set of articles such as a dozen, bale, gross, or carload.
common area  In landlord-tenant law, an area over which the landlord retains control but which is often used by or for the benefit of tenants. For example, hallways in an apartment building.
common carrier  One who undertakes, for hire or reward, to transport the goods of such of the public as choose to employ him.
common law  The law that is made and applied by judges.
common shareholders  Shareholders who claim the residual profits and assets of a corporation, and usually have the exclusive power and right to elect the directors of the corporation.
comparative fault  Often used synonymously with comparative negligence. But also sometimes used to refer to a defense that operates like comparative negligence but considers the plaintiff 's and the defendant's overall fault rather than either's negligence alone.
comparative negligence  The contemporary replacement for the traditional doctrine of contributory negligence. The basic idea is that damages are apportioned between the parties to a negligence action in proportion to their relative fault. The details vary from state to state.
compensatory damages  Damages that will compensate a part for direct losses due to an injury suffered.
complaint  The pleading in a civil case in which the plaintiff states his claim and requests relief.
composition with creditors  An agreement between creditors and their common debtor and between themselves whereby the creditors agree to accept the sum or security stipulated in full payment of their claims.
concealment  In contract law, taking active steps to prevent another from learning the truth.
concurrent  Running with; simultaneously with.
condemn  To appropriate land for public use. To adjudge a person guilty; to pass sentence on a person convicted of a crime.
condition  In contract law, a future, uncertain event that creates or extinguishes a duty of performance; a provision or clause in a contract that operates to suspend or rescind a party's duty to perform.
conditional acceptance  An acceptance of a bill of exchange containing some qualification limiting or altering the acceptor's liability on the bill.
conditional gift  A gift that does not become absolute or complete until the occurrence of some express or implied condition.
conditional sale  The term is most frequently applied to a sale in which the seller reserves the title to the goods, although the possession is delivered to the buyer, until the purchase price is paid in full.
condition precedent  A condition that operates to give rise to a contracting party's duty to perform.
condition subsequent  A condition that operates to relieve or discharge one from his obligation under a contract.
confession of judgment  An entry of judgment on the admission or confession of the debtor without the formality, time, or expense involved in an ordinary proceeding.
confirmed letter of credit  The seller's bank agrees to assume liability on the letter of credit issued by the buyer's bank.
confusion  The inseparable intermixture of property belonging to different owners.
consent decree or consent order  Used to refer to the order courts or administrative agencies issue when approving the settlement of a lawsuit or administrative action against some party.
consent restraint  A security transfer restriction requiring a shareholder to obtain the consent of the corporation or its shareholders prior to the shareholder's sale of her shares.
consequential damages  Damages that do not flow directly and immediately from an act but rather flow from the results of the act; damages that are indirect consequences of a breach of contract or certain other legal wrongs. Examples include personal injury, damage to property, and lost profits.
conservator  (of an incompetent person) A person appointed by a court to take care of and oversee the person and estate of an incompetent person.
consideration  In contract law, a basic requirement for an enforceable agreement under traditional contract principles, defined in this text as legal value, bargained for and given in exchange for an act or promise. In corporation law, cash or property contributed to a corporation in exchange for shares, or a promise to contribute such cash or property.
consignee  A person to whom goods are consigned, shipped, or otherwise transmitted, either for sale or for safekeeping.
consignment  A bailment for sale. The consignee does not undertake the absolute obligation to sell or pay for the goods.
consignor  One who sends goods to another on consignment. A shipper or transmitter of goods.
conspicuous  Noticeable by a reasonable person, such as a term or clause in a contract that is in bold print, in capitals, or a contrasting color or type style.
constructive eviction  In landlord-tenant law, a breach of duty by the landlord that makes the premises uninhabitable or otherwise deprives the tenant of the benefit of the lease and gives rise to the tenant's right to vacate the property and terminate the lease.
construe  To read a statute or document for the purpose of ascertaining its meaning and effect, but in doing so the law must be regarded.
contempt  Conduct in the presence of a legislative or judicial body tending to disturb its proceedings or impair the respect due to its authority, or a disobedience to the rules or orders of such a body, which interferes with the due administration of law.
continuation statement  A document, usually a multicopy form, filed in a public office to indicate the continuing viability of a financing statement. See financing statement.
contra  Otherwise; disagreeing with; contrary to.
contract  A legally enforceable promise or set of promises.
contract of adhesion  A contract in which a stronger party is able to dictate terms to a weaker party, leaving the weaker party no practical choice but to adhere to the terms. If the stronger party has exploited its bargaining power to achieve unfair terms, the contract is against public policy.
contribution  In business organization law, the cash or property contributed to a business by its owners.
contributory negligence  A traditional defense to negligence liability based on the plaintiff's failure to exercise reasonable care for his own safety.
conversion  Any distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. That tort committed by a person who deals with chattels not belonging to him in a manner that is inconsistent with the ownership of the lawful owner.
convertible securities  Securities giving their holders the power to exchange those securities for other securities without paying any additional consideration.
conveyance  A written instrument transferring the title to land or some interest therein from one person to another.
copartnership  A partnership.
copyright  A set of exclusive rights, protected by federal law, pertaining to certain creative works such as books, musical compositions, computer programs, works of art, and so forth. The rights are: (1) to reproduce the work in question, (2) to prepare derivative works based on it, (3) to sell or otherwise distribute it, and (4) to perform or display it publicly.
corporation  A form of business organization that is owned by owners, called shareholders, who have no inherent right to manage the business, and is managed by a board of directors that is elected by the shareholders.
corporation by estoppel  A doctrine that prevents persons from denying that a corporation exists when the persons hold themselves out as representing a corporation or believe themselves to be dealing with a corporation.
corporeal  Possessing physical substance; tangible; perceptible to the senses.
counterclaim  A legal claim made in response to the plaintiff 's initial claim in a civil suit. Unlike a defense, the counterclaim is the defendant's affirmative attempt to obtain legal relief; in effect, it states a cause of action entitling the defendant to such relief. Often, the counterclaim must arise out of the occurrence that forms the basis for the plaintiff 's claim.
counteroffer  A cross-offer made by the offeree to the offeror.
countertrade  A buyer's purchase of the seller's goods in exchange for the seller's agreement to purchase goods of the buyer or other person; usually required as a condition to selling goods to a foreign trade corporation.
course of dealing  A sequence of previous conduct between the parties to a transaction that is fairly to be regarded as establishing a common basis for interpreting their contract.
covenant  A contract; a promise.
cover  To obtain substitute or equivalent goods.
credible  As applied to a witness, competent.
creditor  A person to whom a debt or legal obligation is owed, and who has the right to enforce payment of that debt or obligation.
crime  An act prohibited by the state; a public wrong.
criminal law  The body of law setting out public wrongs that the government attempts to correct by prosecuting wrongdoers.
culpable  Blameworthy; denotes breach of legal duty but not necessarily criminal conduct.
cumulative voting  A procedure for voting for a corporation's directors that permits a shareholder to multiply the number of shares she owns by the number of directors to be elected and to cast the resulting total of votes for one or more directors. See straight voting.
curtesy  At common law, a husband's right in property owned by his wife during her life.
custody  The bare control or care of a thing as distinguished from the possession of it.
cy pres  As near as possible. In the law of trusts, a doctrine applied to prevent a charitable trust from failing when the application of trust property to the charitable beneficiary designated by the settlor becomes illegal or impossible to carry out; in such a case, cy pres allows the court to redirect the distribution of trust property for some purpose that is as near as possible to the settlor's general charitable intent.
damages  The sum of money recoverable by a plaintiff who has received a judgment in a civil case.
date of issue  As applied to notes, bonds, and so on of a series, the arbitrary date fixed as the beginning of the term for which they run, without reference to the precise time when convenience or the state of the market may permit their sale or delivery.
D/B/A  Doing business as; indicates the use of a trade name.
deal  To engage in transactions of any kind, to do business with.
debenture  A long-term, unsecured debt security.
debtor  A person who is under a legal obligation to pay a sum of money to another (the creditor).
decedent  A person who has died.
deceit  A tort involving intentional misrepresentation or cheating by means of some device.
decision  The judgment of a court; the opinion merely represents the reasons for that judgment.
declaratory judgment  One that expresses the opinion of a court on a question of law without ordering anything to be done.
decree  An order or sentence of a court of equity determining some right or adjudicating some matter affecting the merits of the cause.
deed  A writing, sealed and delivered by the parties; an instrument conveying real property.
deed of trust  A three-party instrument used to create a security interest in real property in which the legal title to the real property is placed in one or more trustees to secure the repayment of a sum of money or the performance of other conditions.
de facto  In fact, actual. Often used in contrast to de jure to refer to a real state of affairs.
de facto corporation  A corporation that has complied substantially with the mandatory conditions precedent to incorporation, taken as a whole.
defalcation  The word includes both embezzlement and misappropriation and is a broader term than either.
defamation  An intentional tort that prohibits the publication of false and defamatory statements concerning another.
default  Fault; neglect; omission; the failure of a party to an action to appear when properly served with process; the failure to perform a duty or obligation; the failure of a person to pay money when due or when lawfully demanded.
defeasible  Regarding title to property, capable of being defeated. A title to property that is open to attack or that may be defeated by the performance of some act.
defend  To oppose a claim or action; to plead in defense of an action; to contest an action suit or proceeding.
defendant  The party who is sued in a civil case, or the party who is prosecuted in a criminal case.
defendant in error  Any of the parties in whose favor a judgment was rendered that the losing party seeks to have reversed or modified by writ of error and whom he names as adverse parties.
defense  A rule of law entitling the defendant to a judgment in his favor even if the plaintiff proves all elements of his claim or cause of action.
deficiency  That part of a debt that a mortgage was made to secure, not realized by the liquidation of the mortgaged property. Something that is lacking.
defraud  To deprive another of a right by deception or artifice.
de jure  According to the law; legitimate; by legal right.
de jure corporation  A corporation that has complied substantially with each of the mandatory conditions precedent to incorporation.
delegation  In constitutional law and administrative law, a process whereby a legislature effectively hands over some of its legislative power to an administrative agency that it has created, thus giving the agency power to make law within the limits set by the legislature. In contract law, a transaction whereby a person who owes a legal duty to perform under a contract appoints someone else to carry out his performance.
deliver  To surrender property to another person.
demand  A claim; a legal obligation; a request to perform an alleged obligation; a written statement of a claim. In corporation law, a request that the board of directors sue a person who has harmed the corporation; a prerequisite to a shareholder derivative suit.
demurrer  A civil motion that attacks the plaintiff 's complaint by assuming the truth of the facts stated in the complaint for purposes of the motion, and by arguing that even if these facts are true, there is no rule of law entitling the plaintiff to recovery. Roughly similar to the motion to dismiss for failure to state a claim on which relief can be granted.
de novo  Anew; over again; a second time. A trial de novo, for example, is a new trial in which the entire case is retried.
deposition  A form of discovery consisting of the oral examination of a party or a party's witness by the other party's attorney.
deputy  A person subordinate to a public officer whose business and object is to perform the duties of the principal.
derivative suit  Also called derivative action. A suit to enforce a corporate right of action brought on behalf of a corporation by one or more of its shareholders.
descent  Hereditary succession. It is the title whereby, upon the death of an ancestor, the heir acquires the ancestor's estate under state law.
detriment  Any act or forbearance by a promisee. A loss or harm suffered in person or property.
devise  In a will, a gift of real property.
dictum  Language in a judicial opinion that is not necessary for the decision of the case and that, while perhaps persuasive, does not bind subsequent courts. Distinguished from holding.
directed verdict  A verdict issued by a judge who has, in effect, taken the case away from the jury by directing a verdict for one party. Usually, the motion for a directed verdict is made at trial by one party after the other party has finished presenting his evidence.
disaffirm  In contract law, a party's exercise of his power to avoid a contract entered before the party reached the age of majority; a minor's cancellation of his contract.
discharge  Release from liability.
discharge in bankruptcy  An order or decree rendered by a court in bankruptcy proceedings, the effect of which is to satisfy all debts provable against the estate of the bankrupt as of the time when the bankruptcy proceedings were initiated.
disclaimer  A term in a contract whereby a party attempts to relieve itself of some potential liability associated with the contract. The most common example is the seller's attempt to disclaim liability for defects in goods that it sells.
discount  A loan on an evidence of debt, where the compensation for the use of the money until the maturity of the debt is deducted from the principal and retained by the lender at the time of making the loan.
discount shares  Also called discount stock. Shares issued for less than their par value or stated value. See bonus shares and watered shares.
discovery  A process of information gathering that takes place before a civil trial. See deposition and interrogatory.
dishonor  The failure to pay or accept a negotiable instrument that has been properly presented.
dismiss  To order a cause, motion, or prosecution to be discontinued or quashed.
dissenter's rights  A shareholder's right to receive the fair value of her shares from her corporation when she objects to a corporate transaction that significantly alters her rights in the corporation.
dissociation  In partnership law, the change in the relation of the partners caused by any partner ceasing to be associated with the carrying on of the business.
dissolution  In partnership law, the commencement of the winding up process.
distribution  In business organization law, a business's gratuitous transfer of its assets to the owners of the business. Includes cash and property dividends and redemptions.
divided court  A court is so described when there has been a division of opinion between its members on a matter that has been submitted to it for decision.
dividends, cash or property  A corporation's distribution of a portion of its assets to its shareholders, usually corresponding to current or historical corporate profits; unlike a redemption, it is not accompanied by a repurchase of shares.
dividends, share  Also called stock dividends. A corporation's pro rata issuance of shares to existing shareholders for no consideration.
documents of title  A classification of personal property that includes bills of lading, warehouse receipts, dock warrants, and dock receipts.
domain  The ownership of land; immediate or absolute ownership. The public lands of a state are frequently termed the public domain.
domicile  A place where a person lives or has his home; in a strict legal sense, the place where he has his true, fixed, permanent home and principal establishment, and to which place he has, whenever he is absent, the intention of returning.
donee  A person to whom a gift is made.
donor  A person who makes a gift.
double jeopardy clause  A constitutional provision designed to protect criminal defendants from multiple prosecutions for the same offense.
dower  The legal right or interest that a wife has in her husband's real estate by virtue of their marriage.
draft  A written order drawn on one person by another, requesting him to pay money to a designated third person.
drawee  A person on whom a draft is drawn by the drawer.
drawer  The maker of a draft.
due bill  An acknowledgment of a debt in writing, not made payable to order.
dummy  One posing or represented as acting for himself, but in reality acting for another. A tool or "straw man" for the real parties in interest.
dumping  The selling of goods by a seller in a foreign nation at unfairly low prices.
durable power of attorney  A power of attorney that is not affected by the principal's incapacity. See power of attorney and attorney-in-fact.
durable power of attorney for health care  A durable power of attorney in which the principal specifically gives the attorney-in-fact the authority to make health care decisions for her in the event that the principal should become incompetent. Also called health care representative.
duress  Overpowering of the will of a person by force or fear.
earned surplus  Also called retained earnings. A balance sheet account; a corporation's profits that have not been distributed to shareholders.
earnest money  Something given as part of the purchase price to bind the bargain.
easement  The right to make certain uses of another person's property or to prevent another person from making certain uses of his own property.
edict  A command or prohibition promulgated by a sovereign and having the effect of law.
e.g.  For example.
ejectment  By statute in some states, an action to recover the immediate possession of real property.
eleemosynary corporation  A corporation created for a charitable purpose or for charitable purposes.
emancipate  To release; to set free. In contract law, a parent's waiver of his rights to control and receive the services of his minor child.
embezzlement  A statutory offense consisting of the fraudulent conversion of another's personal property by one to whom it has been entrusted, with the intention of depriving the owner thereof, the gist of the offense being usually the violation of relations of a fiduciary character.
eminent domain  A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.
employment at will  A rule stating that if an employment is not for a definite time period, either party may terminate the employment without liability at any time and for any reason that is not otherwise illegal.
enabling legislation  The statute by which a legislative body creates an administrative agency.
en banc (in banc)  By all the judges of a court, with all the judges of a court sitting.
encumbrance  A right in a third person that diminishes the value of the land but is consistent with the passing of ownership of the land by deed.
endorsement  See indorsement.
entity theory  In partnership law, the view that a partnership is a legal entity distinct from the partners who own it. See aggregate theory.
entry  Recordation; noting in a record; going on land; taking actual possession of land.
environmental impact statement  A document that the National Environmental Policy Act requires federal agencies to prepare in connection with any legislative proposals or proposed actions that will significantly affect the environment.
equity  A system of justice that developed in England separate from the common law courts. Few states in the United States still maintain separate equity courts, though most apply equity principles and procedures when remedies derived from the equity courts are sought. A broader meaning denotes fairness and justice. In business organization law, the capital contributions of owners plus profits that have not been distributed to the owners; stated capital plus capital surplus plus earned surplus.
equity of redemption  The right of a mortgagee to discharge the mortgage when due and to have title to the mortgaged property free and clear of the mortgage debt.
error  A mistake of law or fact; a mistake of the court in the trial of an action.
escheat  The reversion of land to the state in the event that a decedent dies leaving no heirs.
estate  An interest in land. Property owned by a decedent at the time of his death.
estop  To bar or stop.
estoppel  That state of affairs that arises when one is forbidden by law from alleging or denying a fact because of his previous action or inaction.
et al.  And another or and others. An abbreviation for the Latin et alius, meaning "and another"; also of et alii, meaning "and others."
eviction  Depriving the tenant of the possession of leased premises.
evidence  That which makes clear or ascertains the truth of the fact or point in issue either on the one side or the other; those rules of law whereby we determine what testimony is to be admitted and what rejected in each case and what is the weight to be given to the testimony admitted.
exception  An objection; a reservation; a contradiction.
exclusionary rule  The rule that bars the admissibility in criminal proceedings of evidence seized in violation of the Fourth Amendment's prohibition against unreasonable searches and seizures.
exculpatory clause  A clause in a contract or trust instrument that excuses a party from some duty.
executed  When applied to written instruments, synonymous with the word signed; more frequently, it means everything has been done to complete the transaction; that is, the instrument has been signed, sealed, and delivered. An executed contract is one in which the object of the contract is performed.
execution  A process of enforcing a judgment, usually by having an appropriate officer seize property of the defendant and sell it at a judicial sale. The final consummation of a contract or other instrument, including completion of all the formalities needed to make it binding.
executive order  A legal rule issued by a chief executive (e.g., the president or a state governor), usually pursuant to a delegation of power from the legislature.
executor  The personal representative appointed to administer the estate of a person who died leaving a valid will.
executory  Not yet executed; not yet fully performed, completed, fulfilled, or carried out; to be performed wholly or in part.
exemption  A release from some burden, duty, or obligation; a grace; a favor; an immunity; taken out from under the general rule, not to be like others who are not exempt.
exhibit  A copy of a written instrument on which a pleading is founded, annexed to the pleading and by reference made a part of it. Any paper or thing offered in evidence and marked for identification.
ex post facto  After the fact. The U.S. Constitution prohibits ex post facto criminal laws, meaning those that criminalize behavior that was legal when committed.
express warranty  A warranty made in words, either oral or written.
expropriation  A government's taking of a business's assets, such as a manufacturing facility, usually without just compensation.
ex ship  A shipping term that does not specify a particular ship for transportation of goods but does not place the expense and risk of transportation on the seller until the goods are unloaded from whatever ship is used.
face value  The nominal or par value of an instrument as expressed on its face; in the case of a bond, this is the amount really due, including interest.
factor  An agent who is employed to sell goods for a principal, usually in his own name, and who is given possession of the goods.
false imprisonment  An intentional tort that prohibits the unlawful confinement of another for an appreciable time without his consent.
FAS  An abbreviation for the expression free alongside ship.
federal supremacy  The ability of federal laws to defeat inconsistent state laws in case they conflict.
fee simple absolute  The highest form of land ownership, which gives the owner the right to possess and use the land for an unlimited period of time, subject only to governmental or private restrictions, and unconditional power to dispose of the property during his lifetime or upon his death.
felony  As a general rule, all crimes punishable by death or by imprisonment in a state prison.
fiction  An assumption made by the law that something is true that is or may be false.
fiduciary  One who holds goods in trust for another or one who holds a position of trust and confidence.
field warehousing  A method of protecting a security interest in the inventory of a debtor whereby the creditor or his agent retains the physical custody of the debtor's inventory, which is released to the debtor as he complies with the underlying security agreement.
financing statement  A document, usually a multicopy form, filed in a public office serving as constructive notice to the world that a creditor claims a security interest in collateral that belongs to a certain named debtor.
firm offer  Under the Uniform Commercial Code, a signed, written offer by a merchant containing assurances that it will be held open, and which is not revocable for the time stated in the offer, or for a reasonable time if no such time is stated.
fixture  A thing that was originally personal property and that has been actually or constructively affixed to the soil itself or to some structure legally a part of the land.
FOB  An abbreviation of free on board.
force majeure clause  A contract provision, commonly encountered in international agreements for the sale of goods, that excuses nonperformance that results from conditions beyond the parties' control.
foreclosure  To terminate the rights of the mortgagor/owner of property.
foreign corporation  A corporation incorporated in one state doing business in another state. See alien corporation.
foreign trade corporation  A corporation in an NME nation that is empowered by the government to conduct the whole business of exporting or importing a particular product.
forwarder  A person who, having no interest in goods and no ownership or interest in the means of their carriage, undertakes, for hire, to forward them by a safe carrier to their destination.
franchise  A special privilege conferred by government on individuals, and which does not belong to the citizens of a country generally, of common right. Also a contractual relationship establishing a means of marketing goods or services giving certain elements of control to the supplier (franchisor) in return for the right of the franchisee to use the supplier's tradename or trademark, usually in a specific marketing area.
fraud  Misrepresentation made with knowledge of its falsity and intent to deceive. See misrepresentation.
freeze-out  In corporation law, a type of oppression by which only minority shareholders are forced to sell their shares.
fungible goods  Goods, any unit of which is from its nature or by mercantile custom treated as the equivalent of any other unit.
future advances  Money or other value provided to a debtor by a creditor subsequent to the time a security interest in the debtor's collateral is taken by that creditor.
futures  Contracts for the sale and future delivery of stocks or commodities, wherein either party may waive delivery, and receive or pay, as the case may be, the difference in market price at the time set for delivery.
garnishee  Used as a noun, the third party who is subjected to the process of garnishment. Used as a verb, to institute garnishment proceedings; to cause a garnishment to be levied on the garnishee.
garnishment  A statutory proceeding whereby money, property, wages, or credits of the defendant that are in the hands of a third party are seized to satisfy a judgment or legally valid claim that the plaintiff has against the defendant.
general partnership  See partnership.
gift  A voluntary transfer of property for which the donor receives no consideration in return.
good faith  Honesty in fact; an honest intention to abstain from taking an unfair advantage of another.
goodwill  The value of a business due to expected continued public patronage of the business.
grantee  A person to whom a grant is made.
grantor  A person who makes a grant.
gravamen  The gist, essence, or central point of a legal claim or argument.
gray market goods  Goods lawfully bearing trademarks or using patented or copyrighted material, but imported into a foreign market without the authorization of the owner of the trademark, patent, or copyright.
guarantor  A person who promises to perform the same obligation as another person (called the principal), upon the principal's default.
guaranty  An undertaking by one person to be answerable for the payment of some debt, or the due performance of some contract or duty by another person, who remains liable to pay or perform the same.
guardian  A person (in some rare cases, a corporation) to whom the law has entrusted the custody and control of the person, or estate, or both, of an incompetent person.
habeas corpus  Any of several common law writs having as their object to bring a party before the court or judge. The only issue it presents is whether the prisoner is restrained of his liberty by due process.
hearing  The supporting of one's contentions by argument and, if need be, by proof.
hedging  A market transaction in which a party buys a certain quantity of a given commodity at the price current on the date of the purchase and sells an equal quantity of the same commodity for future delivery for the purpose of getting protection against loss due to fluctuation in the market.
heirs  Those persons appointed by law to succeed to the estate of a decedent who has died without leaving a valid will.
holder  A person in possession of a document of title or an instrument payable or indorsed to him, his order, or to bearer.
holder in due course  A person who is a holder of a negotiable instrument who took the instrument for value, in good faith, without notice that it is overdue or has been dishonored or that there is any uncured default with respect to payment of another instrument issued as part of the same series, without notice that the instrument contains an unauthorized signature or has been altered, without notice of any claim of a property or possessory interest in it, and without notice that any party has any defense against it or claim in recoupment to it.
holding  Language in a judicial opinion that is necessary for the decision the court reached and that is said to be binding on subsequent courts. Distinguished from dictum.
holding company  A corporation whose purpose or function is to own or otherwise hold the shares of other corporations either for investment or control.
holographic will  A will written in the handwriting of the testator.
homestead  In a legal sense, the real estate occupied as a home and also the right to have it exempt from levy and forced sale. It is the land, not exceeding a prescribed amount, upon which the owner and his family reside, including the house in which they reside as an indispensable part.
i.e.  That is.
illusory  Deceiving or intending to deceive, as by false appearances; fallacious. An illusory promise is a promise that appears to be binding but that in fact does not bind the promisor.
immunity  A personal favor granted by law, contrary to the general rule.
impanel  To place the names of the jurors on a panel; to make a list of the names of those persons who have been selected for jury duty; to go through the process of selecting a jury that is to try a cause.
implied warranty  A warranty created by operation of law.
implied warranty of habitability  Implied warranty arising in lease or sale of residential real estate that the property will be fit for human habitation.
impossibility  A doctrine under which a party to a contract is relieved of his or her duty to perform when that performance has become impossible because of the occurrence of an event unforeseen at the time of contracting.
inalienable  Incapable of being alienated, transferred, or conveyed; nontransferable.
in camera  In the judge's chambers; in private.
incapacity  A legal disability, such as infancy or want of authority.
inception  Initial stage. The word does not refer to a state of actual existence but to a condition of things or circumstances from which the thing may develop.
inchoate  Imperfect; incipient; not completely formed.
incidental damages  Collateral damages that result from a breach of contract, including all reasonable expenses that are incurred because of the breach; damages that compensate a person injured by a breach of contract for reasonable costs he incurs in an attempt to avoid further loss.
independent contractor  A person who contracts with a principal to perform some task according to his own methods, and who is not under the principal's control regarding the physical details of the work. Under the Restatement (Second) of Agency, an independent contractor may or may not be an agent.
indictment  A finding by a grand jury that there is probable cause to believe an accused committed a crime.
indorsement  Writing on the back of an instrument; the contract whereby the holder of an instrument (such as a draft, check, or note) or a document (such as a warehouse receipt or bill of lading) transfers to another person his right to such instrument and incurs the liabilities incident to the transfer.
infant  See minor.
information  A written accusation of crime brought by a public prosecuting officer to a court without the intervention of a grand jury.
injunction  An equitable remedy whereby the defendant is ordered to perform certain acts or to desist from certain acts.
in pari delicto  Equally at fault in tort or crime; in equal fault or guilt.
in personam  Against a person. For example, in personam jurisdiction.
in re  In the matter of.
in rem  Against a thing and not against a person; concerning the condition or status of a thing; for example, in rem jurisdiction.
inside information  Confidential information possessed by a person due to his relationship with a business.
insolvency  In corporation law, the inability of a business to pay its currently maturing obligations.
instrument  Formal or legal documents in writing, such as contracts, deeds, wills, bonds, leases, and mortgages.
insurable interest  Any interest in property such that the owner would experience a benefit from the continued existence of the property or a loss from its destruction.
inter alia  Among other things.
interlocutory  Something not final but deciding only some subsidiary matter raised while a lawsuit is pending.
interpleader  An equitable remedy applicable where one fears injury from conflicting claims. Where a person does not know which of two or more persons claiming certain property held by him has a right to it, filing a bill of interpleader forces the claimants to litigate the title between themselves.
interrogatory  Written questions directed to a party, answered in writing, and signed under oath.
inter se  Between or among themselves.
interstate  Between or among two or more states.
intervening cause  An intervening force that plays so substantial a role in causing a particular plaintiff's injury that it relieves a negligent defendant of any responsibility for that injury. Also called superseding cause.
intervention  A proceeding by which one not originally made a party to an action or suit is permitted, on his own application, to appear therein and join one of the original parties in maintaining his cause of action or defense, or to assert some cause of action against some or all of the parties to the proceeding as originally instituted.
inter vivos  A transaction between living persons.
intestate  Having died without leaving a valid will.
in toto  Wholly, completely.
intrastate  Within a particular state.
investment contract  In securities law, a type of security encompassing any contract by which an investor invests in a common enterprise with an expectation of profits solely from the efforts of persons other than the investor.
invitee  A person who is on private premises for a purpose connected with the business interests of the possessor of those premises, or a member of the public who is lawfully on land open to the public.
ipso facto  By the fact itself; by the very fact.
irrevocable letter of credit  The issuing bank may not revoke the letter of credit issued by the buyer's bank.
issue  Lineal descendants such as children and grandchildren. This category of persons includes adopted children.
issued shares  A corporation's shares that a corporation has sold to its shareholders. Includes shares repurchased by the corporation and retained as treasury shares, but not shares canceled or returned to unissued status.
issuer  In securities law, a person who issues or proposes to issue a security; the person whose obligation is represented by a security.
joint and several liability  Liability of a group of persons in which the plaintiff may sue any member of the group individually and get a judgment against that person, or may sue all members of the group collectively.
joint bank account  A bank account of two persons so fixed that they shall be joint owners thereof during their mutual lives, and the survivor shall take the whole on the death of other.
joint liability  Liability of a group of persons in which, if one of these persons is sued, he can insist that the other liable parties be joined to the suit as codefendants, so that all must be sued collectively.
jointly  Acting together or in concert or cooperating; holding in common or interdependently, not separately. Persons are jointly bound in a bond or note when both or all must be sued in one action for its enforcement, not either one at the election of the creditor.
joint tenancy  An estate held by two or more jointly, with an equal right in all to share in the enjoyments of the land during their lives. An incident of joint tenancy is the right of survivorship.
joint venture  A form of business organization identical to a partnership, except that it is engaged in a single project, not carrying on a business.
judgment  A court's final resolution of a lawsuit or other proceeding submitted to it for decision.
judgment lien  The statutory lien on the real property of a judgment debtor that is created by the judgment itself. At common law, a judgment imposes no lien on the real property of the judgment debtor, and to subject the property of the debtor to the judgment, it was necessary to take out a writ called an elegit.
judgment notwithstanding the verdict  A judgment made by a judge contrary to a prior jury verdict whereby the judge effectively overrules the jury's verdict. Also called the j.n.o.v. or the judgment non obstante veredicto. Similar to the directed verdict, except that it occurs after the jury has issued its verdict.
judicial review  The courts' power to declare the actions of the other branches of government unconstitutional.
jurisdiction  The power of a court to hear and decide a case.
jurisprudence  The philosophy of law. Also sometimes used to refer to the collected positive law of some jurisdiction.
jury  A body of lay persons, selected by lot, or by some other fair and impartial means, to ascertain, under the guidance of the judge, the truth in questions of fact arising either in civil litigation or a criminal process.
kite  To secure the temporary use of money by issuing or negotiating worthless paper and then redeeming such paper with the proceeds of similar paper. The word is also used as a noun, meaning the worthless paper thus employed.
laches  The established doctrine of equity that, apart from any question of statutory limitation, its courts will discourage delay and sloth in the enforcement of rights. Equity demands conscience, good faith, and reasonable diligence.
land contract  A conditional agreement for the sale and purchase of real estate in which the legal title to the property is retained by the seller until the purchaser has fulfilled the agreement, usually by completing the payment of the agreed-on purchase price.
larceny  The unlawful taking and carrying away of personal property with the intent to deprive the owner of his property permanently.
last clear chance  Under traditional tort principles, a doctrine that allowed a contributorily negligent plaintiff to recover despite his failure to exercise reasonable care for his own safety by arguing that the defendant had the superior opportunity (last clear chance) to avoid the harm.
law merchant  The custom of merchants, or lex mercatorio, that grew out of the necessity and convenience of business, and that, although different from the general rules of the common law, was engrafted into it and became a part of it. It was founded on the custom and usage of merchants.
leading case  The most significant and authoritative case regarded as having settled and determined a point of law. Often, the first case to have done so in a definitive and complete fashion.
leading questions  Questions that suggest to the witness the answer desired or those that assume a fact to be proved that is not proved, or that, embodying a material fact, allow the witness to answer by a simple negative or affirmative.
lease  A contract for the possession and use of land or other property, including goods, on one side, and a recompense of rent or other income on the other; a conveyance to a person for life, or years, or at will in consideration of a return of rent or other recompense.
legacy  A bequest; a testamentary gift of personal property. Sometimes incorrectly applied to a testamentary gift of real property.
legal  According to the principles of law; according to the method required by statute; by means of judicial proceedings; not equitable.
letter of credit  An instrument containing a request (general or special) to pay to the bearer or person named money, or sell him or her some commodity on credit or give something of value and look to the drawer of the letter for recompense.
levy  At common law, a levy on goods consisted of an officer's entering the premises where they were and either leaving an assistant in charge of them or removing them after taking an inventory. Today, courts differ as to what is a valid levy, but by the weight of authority there must be an actual or constructive seizure of the goods. In most states, a levy on land must be made by some unequivocal act of the officer indicating the intention of singling out certain real estate for the satisfaction of the debt.
libel  The defamation action appropriate to printed or written defamations, or to those that have a physical form.
license  A personal privilege to do some act or series of acts on the land of another, without possessing any ownership interest in the land. A permit or authorization to do something that, without a license, would be unlawful.
licensee  A person lawfully on land in possession of another for purposes unconnected with the business interests of the possessor.
lien  In its most extensive meaning, it is a charge on property for the payment or discharge of a debt or duty; a qualified right; a proprietary interest that, in a given case, may be exercised over the property of another.
life estate  A property interest that gives a person the right to possess and use property for a time that is measured by his lifetime or that of another person.
limited liability limited partnership  A limited partnership that has elected to obtain limited liability status for all of its partners, including general partners, by filing with the secretary of state. Also called LLLP.
limited liability partnership  A partnership that has elected to obtain limited liability for its partners by filing with the secretary of state. Also called LLP.
limited partner  An owner of a limited partnership who has no right to manage the business but who possesses liability limited to his capital contribution to the business.
limited partnership  A form of business organization that has one or more general partners who manage the business and have unlimited liability for the obligations of the business and one or more limited partners who do not manage and have limited liability.
liquidated damages  The stipulation by the parties to a contract of the sum of money to be recovered by the aggrieved party in the event of a breach of the contract by the other party.
liquidated debt  A debt that is due and certain. That is, one that is not the subject of a bona fide dispute either as to its existence or the amount that is owed.
lis pendens  A pending suit. As applied to the doctrine of lis pendens, it is the jurisdiction, power, or control that courts acquire over property involved in a suit, pending the continuance of the action, and until its final judgment.
listing contract  A so-called contract whereby an owner of real property employs a broker to procure a purchaser without giving the broker an exclusive right to sell. Under such an agreement, it is generally held that the employment may be terminated by the owner at will, and that a sale of the property by the owner terminates the employment.
litigant  A party to a lawsuit.
living will  A document executed with specific legal formalities stating a person's preference that heroic life support measures should not be used if there is no hope of the person's recovery.
LLLP  See limited liability limited partnership.
LLP  See limited liability partnership.
long-arm statute  A state statute that grants to a state's courts broad authority to exercise jurisdiction over out-of-state persons who have contacts with the state.
looting  In corporation law, the transfer of a corporation's assets to its managers or controlling shareholders at less than fair value.
magistrate  A word commonly applied to the lower judicial officers such as justices of the peace, police judges, town recorders, and other local judicial functionaries. In a broader sense, a magistrate is a public civil officer invested with some part of the legislative, executive, or judicial power given by the Constitution. The president of the United States is the chief magistrate of the nation.
maker  A person who makes or executes an instrument. The signer of an instrument.
malfeasance  The doing of an act that a person ought not to do at all. It is to be distinguished from misfeasance—the improper doing of an act that a person might lawfully do.
malicious prosecution  An intentional tort designed to protect against the wrongful initiation of criminal proceedings.
mandamus  We command. It is a command issuing from a competent jurisdiction, in the name of the state or sovereign, directed to some inferior court, officer, corporation, or person, requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom it is directed, or from operation of law.
margin  A deposit by a buyer in stocks with a seller or a stockbroker, as security to cover fluctuations in the market in reference to stocks that the buyer has purchased but for which he has not paid. Commodities are also traded on margin.
marshals  Ministerial officers belonging to the executive department of the federal government, who with their deputies have the same powers of executing the laws of the United States in each state as the sheriffs and their deputies in such state may have in executing the laws of that state.
material  Important. In securities law, a fact is material if a reasonable person would consider it important in his decision to purchase shares or to vote shares.
materialman's lien  A claim created by law for the purpose of securing a priority of payment of the price or value of materials furnished in erecting or repairing a building or other structure.
mechanic's lien  A claim created by law for the purpose of securing a priority of payment of the price or value of work performed and materials furnished in erecting or repairing a building or other structure; as such, it attaches to the land as well as to the buildings erected therein.
memorandum  A writing.
mens rea  A guilty mind; criminal intent.
merchant  Under the Uniform Commercial Code, one who regularly deals in goods of the kind sold in the contract at issue, or holds himself out as having special knowledge or skill relevant to such goods, or who makes the sale through an agent who regularly deals in such goods or claims such knowledge or skill.
merchantable  Of good quality and salable, but not necessarily the best. As applied to articles sold, the word requires that the article shall be such as is usually sold in the market, of medium quality, and bringing the average price.
merger  In corporation law, traditionally, a transaction by which one corporation acquires another corporation, with the acquiring corporation being owned by the shareholders of both corporations and the acquired corporation going out of existence. Today, loosely applied to any negotiated acquisition of one corporation by another.
merger clause  A contract clause providing that the written contract is the complete expression of the parties' agreement. Also called integration clause.
mining partnership  A form of business organization used for mining and drilling mineral resources that is identical to a partnership, except that mining partnership interests are freely transferable.
minor  A person who has not reached the age at which the law recognizes a general contractual capacity (called majority), which is 18 in most states.
misdemeanor  Any crime that is punishable neither by death nor by imprisonment in a state prison.
misrepresentation  The assertion of a fact that is not in accord with the truth. A contract can be rescinded on the ground of misrepresentation when the assertion relates to a material fact or is made fraudulently and the other party actually and justifiably relies on the assertion.
mistrial  An invalid trial due to lack of jurisdiction, error in selection of jurors, or some other fundamental requirement.
mitigation of damages  A reduction in the amount of damages due to extenuating circumstances.
mortgage  A conveyance of property to secure the performance of some obligation, the conveyance to be void on the due performance thereof.
mortgagee  The creditor to whom property has been mortgaged to secure the performance of an obligation.
mortgagor  The owner of the property that has been mortgaged or pledged as security for a debt.
motion to dismiss  A motion made by the defendant in a civil case to defeat the plaintiff's case, usually after the complaint or all the pleadings have been completed. The most common form of motion to dismiss is the motion to dismiss for failure to state a claim on which relief can be granted, which attacks the legal sufficiency of the plaintiff's complaint. See demurrer.
motive  The cause or reason that induced a person to commit a crime.
mutuality  Reciprocal obligations of the parties required to make a contract binding on either party.
national ambient air quality standards  Federally established air pollution standards designed to protect the public health and welfare.
natural law  A body of allegedly existing ethical rules or principles that is morally superior to positive law and that prevails over positive law in case of a clash between it and the natural law. See positive law.
necessaries  That which is reasonably necessary for a minor's proper and suitable maintenance, in view of the income level and social position of the minor's family.
negligence  The omission to do something that a reasonable person, guided by those considerations that ordinarily regulate human affairs, would do, or doing something that a prudent and reasonable person would not do.
negligence per se  The doctrine that provides that a conclusive presumption of breach of duty arises when a defendant has violated a statute and thereby caused a harm the statute was designed to prevent to a person the statute was designed to protect.
negotiable  Capable of being transferred by indorsement or delivery so as to give the holder a right to sue in his or her own name and to avoid certain defenses against the payee.
negotiable instrument  An instrument that may be transferred or negotiated, so that the holder may maintain an action thereon in his own name.
negotiation  The transfer of an instrument in such form that the transferee becomes a holder.
NME  A nonmarket economy; a socialist economy in which a central government owns and controls all significant means of production, thereby setting prices and the levels of production.
nolo contendere  A no contest plea by the defendant in a criminal case that has much the same effect as a guilty plea but that cannot be used as an admission of guilt in other legal proceedings.
nominal damages  Damages that are recoverable when a legal right is to be vindicated against an invasion that has produced no actual present loss.
non compos mentis  Mentally incompetent.
nonfeasance  In the law of agency, the total omission or failure of an agent to enter on the performance of some distinct duty or undertaking that he or she has agreed with the principal to do.
non obstante veredicto  Notwithstanding the verdict. J.n.o.v. See judgment notwithstanding the verdict.
no-par value stock  Stock of a corporation having no face or par value.
novation  A mutual agreement, between all parties concerned, for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the debtor or another, or a like agreement for the discharge of a debtor to his creditor by the substitution of a new creditor.
nudum pactum  A naked promise, a promise for which there is no consideration.
nuisance  That which endangers life or health, gives offense to the senses, violates the laws of decency, or obstructs the reasonable and comfortable use of property.
nuncupative will  An oral will. Such wills are valid in some states, but only under limited circumstances and to a limited extent.
oath  Any form of attestation by which a person signifies that he is bound in conscience to perform an act faithfully and truthfully.
obiter dictum  That which is said in passing; a rule of law set forth in a court's opinion but not necessary to decide the case. See dictum.
objection  In the trial of a case the formal remonstrance made by counsel to something that has been said or done, in order to obtain the court's ruling thereon.
obligee  A person to whom another is bound by a promise or other obligation; a promisee.
obligor  A person who is bound by a promise or other obligation; a promisor.
offer  A proposal by one person to another that is intended to create legal relations on acceptance by the person to whom it is made.
offeree  A person to whom an offer is made.
offeror  A person who makes an offer.
opinion  The opinion of the court represents merely the reasons for its judgment, while the decision of the court is the judgment itself.
oppression  The officers, directors, or controlling shareholder's isolation of one group of shareholders for disadvantageous treatment to the benefit of another group of shareholders.
option  A separate contract in which an offeror agrees not to revoke her offer for a stated period of time in exchange for some valuable consideration.
option agreement  A share transfer restriction granting a corporation or its shareholders an option to buy a selling shareholder's shares at a price determined by the agreement.
ordinance  A legislative enactment of a county or an incorporated city or town.
original jurisdiction  The power to decide a case as a trial court.
outstanding shares  A corporation's shares currently held by shareholders.
overdraft  The withdrawal from a bank by a depositor of money in excess of the amount of money he or she has on deposit there.
overdue  When an instrument is not paid when due or at maturity.
overplus  That which remains; a balance left over.
owner's risk  A term employed by common carriers in bills of lading and shipping receipts to signify that the carrier does not assume responsibility for the safety of the goods.
par  Par means equal, and par value means a value equal to the face of a bond or a stock certificate.
parent corporation  A corporation that owns a controlling interest of another corporation, called a subsidiary corporation.
parol  Oral; verbal; by word of mouth.
parol evidence  Where a written contract exists, evidence about promises or statements made prior to or during the execution of the writing that are not contained in the written contract.
parties  All persons who are interested in the subject matter of an action and who have a right to make defense, control the proceedings, examine and cross-examine witnesses, and appeal from the judgment.
partition  A proceeding the object of which is to enable those who own property as joint tenants or tenants in common to put an end to the tenancy so as to vest in each a sole estate in specific property or an allotment of the lands and tenements. If a division of the estate is impracticable, the estate ought to be sold and the proceeds divided.
partners  The owners of a partnership.
partnership  A form of business organization; specifically, an association of two or more persons to carry on a business as co-owners for profit.
partnership agreement  A formal written contract between the partners of a partnership that states the rights and the responsibilities of the partners.
partnership at will  A partnership whose partnership agreement does not specify any term or undertaking to be accomplished.
partnership by estoppel  See purported partnership.
partnership interest  A partner's ownership interest in a partnership which embodies the partner's transferable interest and the partner's management and other rights.
partner's transferable interest  In partnership law, a partner's share of the partnership's profits and losses and right to receive partnership distributions.
party to be charged  The person against whom enforcement of a contract is sought; the person who is asserting the statute of frauds as a defense.
par value  An arbitrary dollar amount assigned to shares by the articles of incorporation, representing the minimum amount of consideration for which the corporation may issue the shares and the portion of consideration that must be allocated to the stated capital amount.
patent  A patent for land is a conveyance of title to government lands by the government; a patent of an invention is the right of monopoly secured by statute to those who invent or discover new and useful devices and processes.
patentee  The holder of a patent.
pawn  A pledge; a bailment of personal property as security for some debt or engagement, redeemable on certain terms, and with an implied power of sale on default.
payee  A person to whom a payment is made or is made payable.
pecuniary  Financial; pertaining or relating to money.
pendente lite  During the litigation.
per capita  A distribution of property in which each member of a group shares equally.
per curiam  By the court as a whole, without an opinion signed by a particular judge.
peremptory challenge  A challenge to a proposed juror that a defendant may make as an absolute right, and that cannot be questioned by either opposing counsel or the court.
perfection  The process or method by which a secured party obtains a priority in certain collateral belonging to a debtor against creditors or claimants of a debtor; it usually entails giving notice of the security interest, such as by taking possession or filing a financial statement.
performance  The fulfillment of a contractual duty.
periodic tenancy  The tenancy that exists when the landlord and tenant agree that rent will be paid in regular successive intervals until notice to terminate is given but do not agree on a specific duration of the lease. A typical periodic tenancy is a tenancy from month to month.
perjury  The willful and corrupt false swearing or affirming, after an oath lawfully administered, in the course of a judicial or quasi-judicial proceeding, as to some matter material to the issue or point in question.
per se  In itself or as such.
personal property  All objects and rights, other than real property, that can be owned. See real property.
per stirpes  A distribution in which each surviving descendant divides the share that his or her parent would have taken if the parent had survived. Also called by right of representation.
petition  In equity pleading, a petition is in the nature of a pleading (at least when filed by a stranger to the suit) and forms a basis for independent action.
petition (bankruptcy)  The document filed with the appropriate federal court that initiates a bankruptcy proceeding. It may be either a voluntary petition (i.e., filed by the debtor) or an involuntary petition (i.e., filed by creditors).
piercing the corporate veil  Holding a shareholder responsible for acts of a corporation due to a shareholder's domination and improper use of the corporation.
plaintiff  The party who sues in a civil case.
plaintiff in error  The unsuccessful party to the action who prosecutes a writ of error in a higher court.
plea  A plea is an answer to a declaration or complaint or any material allegation of fact therein that, if untrue, would defeat the action. In criminal procedure, a plea is the matter that the accused, on his arraignment, alleges in answer to the charge against him.
pleadings  The documents the parties file with the court when they state their claims and counterarguments early in a civil case. Examples include the complaint and the answer.
pledge  A pawn; a bailment of personal property as security for some debt or engagement, redeemable on certain terms, and with an implied power of sale on default.
pledgee  A person to whom personal property is pledged by a pledgor.
pledgor  A person who makes a pledge of personal property to a pledgee.
police power  The states' power to regulate to promote the public health, safety, morals, and welfare.
positive law  Laws actually and specifically enacted or adopted by proper authority for the government of a jural society as distinguished from principles of morality or laws of honor.
possession  Respecting real property, exclusive dominion and control such as owners of like property usually exercise over it. Manual control of personal property either as owner or as one having a qualified right in it.
postdated check  A check dated with a date later than its date of issue.
power of attorney  A written authorization by a principal to an agent to perform specified acts on behalf of the principal. See attorney-in-fact.
precedent  A past judicial decision relied on as authority in a present case.
preemptive right  A shareholder's option to purchase new issuances of shares in proportion to the shareholder's current ownership of the corporation.
preference  The act of a debtor in paying or securing one or more of his creditors in a manner more favorable to them than to other creditors or to the exclusion of such other creditors. In the absence of statute, a preference is perfectly good, but to be legal it must be bona fide, and not a mere subterfuge of the debtor to secure a future benefit to himself or to prevent the application of his property to his debts.
preferential  Having priority.
preferred shareholders  Shareholders who have dividend and liquidation preferences over other classes of shareholders, usually common shareholders.
prenuptial contract  A contract between prospective marriage partners respecting matters such as property ownership and division.
preponderance  Most; majority; more probable than not.
prerogative  A special power, privilege, or immunity, usually used in reference to an official or his office.
presentment  A demand for acceptance or payment of a negotiable instrument made on the maker, acceptor, drawee, or other payor by or on behalf of the holder.
presumption  A term used to signify that which may be assumed without proof, or taken for granted. It is asserted as a self-evident result of human reason and experience.
pretermitted  In the law of wills, an heir born after the execution of the testator's will.
prima facie  At first sight; a fact that is presumed to be true unless disproved by contrary evidence.
prima facie case  A case sufficiently strong that, unless rebutted by the defendant in some fashion, it entitles the plaintiff to recover against the defendant.
principal  In agency law, one under whose direction an agent acts and for whose benefit that agent acts.
priority  Having precedence or the better right.
privilege  Generally, a legal right to engage in conduct that would otherwise result in legal liability. Privileges are commonly classified as absolute (unqualified) or conditional (qualified). Occasionally, privilege is also used to denote a legal right to refrain from particular behavior (e.g., the constitutional privilege against self-incrimination).
privity of contract  The existence of a direct contractual relation between two parties.
probate  A term used to include all matters of which probate courts have jurisdiction, which in many states are the estates of deceased persons and of persons under guardianship.
procedural law  The body of law controlling public bodies such as courts, as they create and enforce rules of substantive law. See substantive law.
proceeds  Whatever is received on the sale, exchange, collection, or other disposition of collateral.
process  Generally, the summons or notice of beginning of suit.
proffer  To offer for acceptance or to make a tender of.
profit  An interest in land giving a person the right to enter land owned by another and remove natural resources (e.g., timber) from the land. Also called profit à prendre.
promisee  The person to whom a promise is made.
promisor  A person who makes a promise to another; a person who promises.
promissory estoppel  An equitable doctrine that protects those who foreseeably and reasonably rely on the promises of others by enforcing such promises when enforcement is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent.
promissory note  Commercial paper or instrument in which the maker promises to pay a specific sum of money to another person, to his order, or to bearer.
promoter  A person who incorporates a business, organizes its initial management, and raises its initial capital.
property  Something that is capable of being owned. A right or interest associated with something that gives the owner the ability to exercise dominion over it.
pro rata  Proportionate; in proportion.
prospectus  In securities law, a document given to prospective purchasers of a security that contains information about an issuer of securities and the securities being issued.
pro tanto  For so much; to such an extent.
proximate cause  A legal limitation on a negligent wrongdoer's liability for the actual consequences of his actions. Such wrongdoers are said to be relieved of responsibility for consequences that are too remote or not the proximate result of their actions. Various tests for proximate cause are employed by the courts.
proxy  A person who is authorized to vote the shares of another person. Also, the written authorization empowering a person to vote the shares of another person.
pseudoforeign corporation  A corporation incorporated under the laws of a state but doing most of its business in one other state.
publicly held corporation  A corporation owned by a large number of widely dispersed shareholders.
punitive damages  Damages designed to punish flagrant wrongdoers and to deter them and others from engaging in similar conduct in the future.
purchase money security interest  A security interest that is (1) taken or retained by the seller of collateral to secure all or part of its purchase price or (2) taken by a debtor to acquire rights in or the use of the collateral if the value is so used.
purported partnership  The appearance of partnership when there is no partnership; it arises when a person misleads a second person into believing that the first person is a partner of a third person; a theory that allows the second person to recover from the first person all reasonable damages the second person has suffered due to his reliance on the appearance of partnership.
put  A type of option permitting a person to sell a fixed number of securities at a fixed price at a specified time. Compare call.
qualified acceptance  A conditional or modified acceptance. In order to create a contract, an acceptance must accept the offer substantially as made; hence, a qualified acceptance is no acceptance at all, is treated by the courts as a rejection of the offer made, and is in effect an offer by the offeree, which the offeror may, if he chooses, accept and thus create a contract.
quantum meruit  As much as is deserved. A part of a common law action in assumpsit for the value of services rendered.
quash  To vacate or make void.
quasi-contract  The doctrine by which courts imply, as a matter of law, a promise to pay the reasonable value of goods or services when the party receiving such goods or services has knowingly done so under circumstances that make it unfair to retain them without paying for them.
quasi-judicial  Acts of public officers involving investigation of facts and drawing conclusions from them as a basis of official action.
quiet title, action to  An action to establish a claimant's title in land by requiring adverse claimants to come into court to prove their claim or to be barred from asserting it later.
quitclaim deed  A deed conveying only the right, title, and interest of the grantor in the property described, as distinguished from a deed conveying the property itself.
quorum  That number of persons, shares represented, or officers who may lawfully transact the business of a meeting called for that purpose.
quo warranto  By what authority. The name of a writ (and also of the whole pleading) by which the government commences an action to recover an office or franchise from the person or corporation in possession of it.
ratification  The adoption or affirmance by a person of a prior act that did not bind him.
real property  The earth's crust and all things firmly attached to it.
rebuttal  Testimony addressed to evidence produced by the opposite party; rebutting evidence.
receiver  One appointed by a court to take charge of a business or the property of another during litigation to preserve it and/or to dispose of it as directed by the court.
recklessness  Behavior that indicates a conscious disregard for a known high risk of probable harm to others.
recognizance  At common law, an obligation entered into before some court of record or magistrate duly authorized, with a condition to do some particular act, usually to appear and answer to a criminal accusation. Being taken in open court and entered on the order book, it was valid without the signature or seal of any of the obligors.
recorder  A public officer of a town or county charged with the duty of keeping the record books required by law to be kept in his or her office and of receiving and causing to be copied in such books such instruments as by law are entitled to be recorded.
redemption  The buying back of one's property after it has been sold. The right to redeem property sold under an order or decree of court is purely a privilege conferred by, and does not exist independently of, statute.
redemption right  Also called a call. In corporation law, the right of a corporation to repurchase shares held by existing shareholders.
redress  Remedy; indemnity; reparation.
reformation  An equitable remedy in which a court effectively rewrites the terms of a contract.
rejection  In contract law, an express or implied manifestation of an offeree's unwillingness to contract on the terms of an offer. In sales law, a buyer's refusal to accept goods because they are defective or nonconforming.
release  The giving up or abandoning of a claim or right to a person against whom the claim exists or the right is to be enforced or exercised. It is the discharge of a debt by the act of the party, in distinction from an extinguishment that is a discharge by operation of law.
remainderman  One who is entitled to the remainder of the estate after a particular estate carved out of it has expired.
remand  A process whereby an appellate court returns the case to a lower court (usually a trial court) for proceedings not inconsistent with the appellate court's decision.
remedy  The appropriate legal form of relief by which a remediable right may be enforced.
remittitur  The certificate of reversal issued by an appellate court upon reversing the order or judgment appealed from.
repatriation  An investor's removal to the investor's nation of profits from his investment in a foreign nation.
replevin  A common law action by which the owner recovers possession of his own goods.
repudiation  Indicating to another party to a contract that the party does not intend to perform his obligations.
res  The thing; the subject matter of a suit; the property involved in the litigation; a matter; property; the business; the affair; the transaction.
rescind  As the word is applied to contracts, to terminate the contract as to future transactions or to annul the contract from the beginning.
rescission  The rescinding or cancellation of a contract or transaction. In general, its effect is to restore the parties to their original precontractual position.
residue  Residuary; all that portion of the estate of a testator of which no effectual disposition has been made by his will otherwise than in the residuary clause.
res ipsa loquitur  Literally, the thing speaks for itself. A doctrine that, in some circumstances, gives rise to an inference that a defendant was negligent and that his negligence was the cause of the plaintiff's injury.
res judicata  A matter that has been adjudicated; that which is definitely settled by a judicial decision.
respondeat superior  A legal doctrine making an employer (or master) liable for the torts of an employee (servant) that are committed within the scope of the employee's employment.
respondent  A term often used to describe the party charged in an administrative proceeding. The party adverse to the appellant in a case appealed to a higher court. In this sense, often synonymous with appellee.
Restatement(s)  Collections of legal rules produced by the American Law Institute, covering certain subject matter areas. Although Restatements are often persuasive to courts, they are not legally binding unless adopted by the highest court of a particular state.
restitution  A remedy whereby one is able to obtain the return of that which he has given the other party, or an amount of money equivalent to that which he has given the other party.
restrictive covenant  An agreement restricting the use of real property.
reverse  To reject or overturn a judgment or order of a court. An appellate court, for example, may reverse the decision of a trial court. See affirm.
revocation  In general, the recalling or voiding of a prior action. In contract law, the withdrawal of an offer by the offeror prior to effective acceptance by the offeree.
right  An interest given and protected by law. In corporation law, an option to purchase shares given to existing shareholders, permitting them to buy quantities of newly issued securities in proportion to their current ownership.
right of appraisal  See dissenter's rights.
right of first refusal  In corporation law, a share transfer restriction granting a corporation or its shareholders an option to match the offer that a selling shareholder receives for her shares. See also option agreement.
right of survivorship  A feature of some types of co-ownership of property causing a co-owner's interest in property to be transferred on his death immediately and by operation of law to his surviving co-owner(s). See tenancy by the entirety and joint tenancy.
riparian  Pertaining to water rights or situated on the bank of a river.
sale of goods  The transfer of ownership to tangible personal property in exchange for money, other goods, or the performance of service.
sale on approval  A conditional sale that is to become final only in case the buyer, after a trial, approves or is satisfied with the article sold.
sale or return  A contract in which the seller delivers a quantity of goods to the buyer on the understanding that if the buyer desires to retain, use, or sell any portion of the goods, he will consider such part as having been sold to him, and that he will return the balance or hold it as bailee for the seller.
sanction  The penalty that will be incurred by a wrongdoer for the violation of a law.
satisfaction  A performance of the terms of an accord. If such terms require a payment of a sum of money, then satisfaction means that such payment has been made.
scienter  In cases of fraud and deceit, the word means knowledge on the part of the person making the representations, at the time when they are made, that they are false. In an action for deceit, scienter must be proved.
S corporation  Also called subchapter S corporation. A close corporation whose shareholders have elected to be taxed essentially like partners are taxed under federal income tax law.
seal  At common law, a seal is an impression on wax or some other tenacious material, but in modern practice the letters l.s. (locus sigilli) or the word seal enclosed in a scroll, either written, or printed, and acknowledged in the body of the instrument to be a seal, are often used as substitutes.
security  An instrument commonly dealt with in the securities markets or commonly recognized as a medium of investment and evidencing an obligation of an issuer or a share, participation, or other interest in an enterprise.
security agreement  An agreement that creates or provides a security interest or lien on personal property. A term used in the UCC including a wide range of transactions in the nature of chattel mortgages, conditional sales, and so on.
security interest  A lien given by a debtor to his creditor to secure payment or performance of a debt or obligation.
service  As applied to a process of courts, the word ordinarily implies something in the nature of an act or proceeding adverse to the party served, or of a notice to him.
set off  That right that exists between two parties, each of whom, under an independent contract, owes an ascertained amount to the other, to calculate their respective debts by way of mutual deduction, so that, in any action brought for the larger debt, the residue only, after such deduction, shall be recovered.
settlor  A person who creates a trust. Also called trustor.
severable contract  A contract that is not entire or indivisible. If the consideration is single, the contract is entire; but if it is expressly or by necessary implication apportioned, the contract is severable. The question is ordinarily determined by inquiring whether the contract embraces one or more subject matters, whether the obligation is due at the same time to the same person, and whether the consideration is entire or apportioned.
share  An equity security, representing a shareholder's ownership of a corporation.
share dividend  See dividends, share.
shareholder  Also called stockholder. An owner of a corporation, who has no inherent right to manage the corporation but has liability limited to his capital contribution.
share split  Also called stock split. Traditionally, a corporation's dividing existing shares into two or more shares, thereby increasing the number of authorized, issued, and outstanding shares and reducing their par value. In modern corporation law, treated like a share dividend.
sight  A term signifying the date of the acceptance or that of protest for the nonacceptance of a bill of exchange; for example, 10 days after sight.
sinking fund  A fund established by an issuer of securities to accumulate funds to repurchase the issuer's securities.
situs  Location; local position; the place where a person or thing is, is his situs. Intangible property has no actual situs, but it may have a legal situs, and for the purpose of taxation, its legal situs is at the place where it is owned and not at the place where it is owed.
slander  The defamation action appropriate to oral defamation.
sole proprietor  The owner of a sole proprietorship.
sole proprietorship  A form of business under which one person owns and controls the business.
sovereign immunity  Generally, the idea that the sovereign (or state) may not be sued unless it consents to be sued. In antitrust law, the statutory immunity from antitrust liability for governmental actions that foreign governments enjoy under the Foreign Sovereign Immunities Act of 1976.
special damages  Actual damages that would not necessarily but because of special circumstances do in fact flow from an injury.
specific performance  A contract remedy whereby the defendant is ordered to perform according to the terms of his contract.
stale check  A check more than six months past its date of issue.
standby letter of credit  The seller's bank promises to pay the buyer if the seller defaults on his contract to deliver conforming goods.
standing  The legal requirement that anyone seeking to challenge a particular action in court must demonstrate that such action substantially affects his legitimate interests before he will be entitled to bring suit.
stare decisis  A doctrine whereby a court is said to be bound to follow past cases that are like the present case on the facts and on the legal issues it presents, and that are issued by an authoritative court.
stated capital  Also called capital stock. A balance sheet account; shareholders' capital contributions representing the par value of par shares or stated value of no-par shares.
stated value  An arbitrary dollar amount assigned to shares by the board of directors, representing the minimum amount of consideration for which the corporation may issue the shares and the portion of consideration that must be allocated to the stated capital account.
state implementation plan  A document prepared by states in which the emissions to the air from individual sources are limited legally so that the area will meet the national ambient air quality standards.
status quo  The existing state of things. In contract law, returning a party to status quo or status quo ante means putting him in the position he was in before entering the contract.
statute of frauds  A statute that provides that no lawsuit may be brought to enforce certain classes of contracts unless there is a written note or memorandum signed by the party against whom enforcement is sought or by his agent.
statute of limitations  A statute that requires that certain classes of lawsuits must be brought within defined limits of time after the right to begin them accrued or the right to bring the lawsuit is lost.
stipulation  An agreement between opposing counsel in a pending action, usually required to be made in open court and entered on the minutes of the court, or else to be in writing and filed in the action, ordinarily entered into for the purpose of avoiding delay, trouble, or expense in the conduct of the action.
stock  A business's inventory. Also, as used in corporation and securities law, see share.
stock dividend  See dividends, share.
stockholder  See shareholder.
stock split  See share split.
stoppage in transitu  A right that the vendor of goods on credit has to recall them, or retake them, on the discovery of the insolvency of the vendee. It continues so long as the carrier remains in the possession and control of the goods or until there has been an actual or constructive delivery to the vendee, or some third person has acquired a bona fide right in them.
stop-payment order  A request made by the drawer of a check to the drawee asking that the order to pay not be followed.
straight voting  A form of voting for directors that ordinarily permits a shareholder to cast a number of votes equal to the number of shares he owns for as many nominees as there are directors to be elected. See cumulative voting.
strict liability  Legal responsibility placed on an individual for the results of his actions irrespective of whether he was culpable or at fault.
strike suit  In corporation law, a derivative suit motivated primarily by an intent to gain an out-of-court settlement for the suing shareholder personally or to earn large attorney's fees for lawyers, rather than to obtain a recovery for the corporation.
subchapter S corporation  See S corporation.
sub judice  Before a court.
sublease  A transfer of some but not all of a tenant's remaining right to possess property under a lease.
sub nom  Under the name of.
subpoena  A process for compelling a witness to appear before a court and give testimony.
subrogation  The substitution of one person in the place of another with reference to a lawful claim or right, frequently referred to as the doctrine of substitution. It is a device adopted or invented by equity to compel the ultimate discharge of a debt or obligation by the person who in good conscience ought to pay it.
subscription  In corporation law, a promise by a person to purchase from a corporation a specified number of shares at a specified price.
subsidiary corporation  A corporation owned and controlled by another corporation, called a parent corporation.
substantive law  The body of law setting out rights and duties that affect how people behave in organized social life. See procedural law.
sui generis  Of its own kind, unique, peculiar to itself.
summary judgment  A method of reaching a judgment in a civil case before trial. The standard for granting a motion for summary judgment is that there be no significant issue of material fact and that the moving party be entitled to judgment as a matter of law.
summary proceedings  Proceedings, usually statutory, in the course of which many formalities are dispensed with. But such proceedings are not concluded without proper investigation of the facts, or without notice, or an opportunity to be heard by the person alleged to have committed the act, or whose property is sought to be affected.
summons  A writ or process issued and served on a defendant in a civil action for the purpose of securing his appearance in the action.
superseding cause  See intervening cause.
supra  Above; above mentioned; in addition to.
surety  A person who promises to perform the same obligation as another person (the principal) and who is jointly liable along with the principal for that obligation's performance. See guarantor.
T/A  Trading as, indicating the use of a trade name.
tacking  The adding together of successive periods of adverse possession of persons in privity with each other, in order to constitute one continuous adverse possession for the time required by the statute, to establish title.
takeover  A tender offer; also applied generally to any acquisition of one business by another business.
tangible  Having a physical existence; real; substantial; evident.
tariff  A tax or duty imposed on goods by a nation when the goods are imported into that nation.
tax haven  A nation that has no or minimal taxation of personal, business, and investment income.
tenancy  General term indicating a possessory interest in property. In landlord-tenant law, a property owner's conveyance to another person of the right to possess the property exclusively for a period of time.
tenancy at sufferance  The leasehold interest that occurs when a tenant remains in possession of property after the expiration of a lease.
tenancy at will  A leasehold interest that occurs when property is leased for an indefinite period of time and is terminable at the will of either landlord or tenant.
tenancy by the entirety  A form of co-ownership of property by a married couple that gives the owners a right of survivorship and cannot be severed during life by the act of only one of the parties.
tenancy for a term  A leasehold interest that results when the landlord and tenant agree on a specific duration for a lease and fix the date on which the tenancy will terminate.
tenancy in common  A form of co-ownership of property that is freely disposable both during life and at death, and in which the co-owners have undivided interests in the property and equal rights to possess the property.
tender  An unconditional offer of payment, consisting in the actual production in money or legal tender of a sum not less than the amount due.
tender offer  A public offer by a bidder to purchase a subject company's shares directly from its shareholders at a specified price for a fixed period of time.
testament  A will; the disposition of one's property to take effect after death.
testator  A deceased person who died leaving a will.
testimony  In some contexts, the word bears the same import as the word evidence, but in most connections it has a much narrower meaning. Testimony is the words heard from the witness in court, and evidence is what the jury considers it worth.
thin capitalization  In corporation law, a ground for piercing the corporate veil due to the shareholders' contributing too little capital to the corporation in relation to its needs.
third-party beneficiary  A person who is not a party to a contract but who has the right to enforce it because the parties to the contract made the contract with the intent to benefit him.
title  Legal ownership; also, a document evidencing legal rights to real or personal property.
tombstone advertisement  A brief newspaper advertisement alerting prospective shareholders that an issuer is offering to sell the securities described in the advertisement.
tort  A private (civil) wrong against a person or his property.
tortfeasor  A person who commits a tort; a wrongdoer.
tortious  Partaking of the nature of a tort; wrongful; injurious.
trade fixtures  Articles of personal property that have been annexed to real property leased by a tenant during the term of the lease and that are necessary to the carrying on of a trade.
trademark  A distinctive word, name, symbol, device, or combination thereof, which enables consumers to identify favored products or services and which may find protection under state or federal law.
trade secret  A secret formula, pattern, process, program, device, method, technique, or compilation of information that is used in its owner's business and affords that owner a competitive advantage. Trade secrets are protected by state law.
transcript  A copy of a writing.
transferee  A person to whom a transfer is made.
transfer of partner's transferable interest  A partner's voluntary transfer of her transferable interest to another person, such as the partner's creditor, giving the transferee the right to receive the partner's share of distributions from the partnership.
transferor  A person who makes a transfer.
treasury shares  Previously outstanding shares repurchased by a corporation that are not canceled or restored to unissued status.
treble damages  Three times provable damages, as may be granted to private parties bringing an action under the antitrust laws.
trespass  An unauthorized entry on another's property.
trial  An examination before a competent tribunal, according to the law of the land, of the facts or law put in issue in a cause, for the purpose of determining such issue. When the court hears and determines any issue of fact or law for the purpose of determining the rights of the parties, it may be considered a trial.
trust  A legal relationship in which a person who has legal title to property has the duty to hold it for the use or benefit of another person. The term is also used in a general sense to mean confidence reposed in one person by another.
trustee  A person in whom property is vested in trust for another.
trustee in bankruptcy  The federal bankruptcy act defines the term as an officer, and he is an officer of the courts in a certain restricted sense, but not in any such sense as a receiver. He takes the legal title to the property of the bankrupt and in respect to suits stands in the same general position as a trustee of an express trust or an executor. His duties are fixed by statute. He is to collect and reduce to money the property of the estate of the bankrupt.
ultra vires  Beyond the powers. In administrative law, it describes an act that is beyond the authority granted to an administrative agency by its enabling legislation. In corporation law, it describes a corporation's performing an act beyond the limits of its purposes as stated in its articles of incorporation.
unconscionable  In contract law, a contract that is grossly unfair or one-sided; one that "shocks the conscience of the court."
unilateral contract  A contract formed by an offer or a promise on one side for an act to be done on the other, and a doing of the act by the other by way of acceptance of the offer or promise; that is, a contract wherein the only acceptance of the offer that is necessary is the performance of the act.
unliquidated  Undetermined in amount.
usage of trade  Customs and practices generally known by people in the business and usually assumed by parties to a contract for goods of that type.
usurpation  In corporation law, an officer, director, or shareholder's taking to himself a business opportunity that belongs to his corporation.
usury  The taking of more than the law allows on a loan or for forbearance of a debt. Illegal interest; interest in excess of the rate allowed by law.
valid  Effective; operative; not void; subsisting; sufficient in law.
value  Under the Code (except for negotiable instruments and bank collections), generally any consideration sufficient to support a simple contract.
vendee  A purchaser of property. The word is more commonly applied to a purchaser of real property, the word buyer being more commonly applied to the purchaser of personal property.
vendor  A person who sells property to a vendee. The words vendor and vendee are more commonly applied to the seller and purchaser of real estate, and the words seller and buyer are more commonly applied to the seller and purchaser of personal property.
venire  The name of a writ by which a jury is summoned.
venue  A requirement distinct from jurisdiction that the court be geographically situated so that it is the most appropriate and convenient court to try the case.
verdict  Usually, the decision made by a jury and reported to the judge on the matters or questions submitted to it at trial. In some situations, however, the judge may be the party issuing a verdict, as, for example, in the motion for a directed verdict. See directed verdict.
versus  Against.
vest  To give an immediate fixed right of present or future enjoyment.
vicarious liability  The imposition of liability on one party for the wrongs of another. Also called imputed liability. For example, the civil liability of a principal for the wrongs his agent commits when acting within the scope of his employment. See respondeat superior. Such liability is also occasionally encountered in the criminal context (e.g., the criminal liability that some regulatory statutes impose on managers for the actions of employees under their supervision).
void  That which is entirely null. A void act is one that is not binding on either party and that is not susceptible of ratification.
voidable  Capable of being made void; not utterly null, but annullable, and hence that may be either voided or confirmed. See avoid.
voidable title  A title that is capable of, or subject to, being judged invalid or void.
voting trust  A type of shareholder voting arrangement by which shareholders transfer their voting rights to a voting trustee.
waive  To throw away; to relinquish voluntarily, as a right that one may enforce, if he chooses.
waiver  The intentional relinquishment of a known right. It is a voluntary act and implies an election by the party to dispense with something of value, or to forgo some advantage that he or she might have demanded and insisted on.
warehouse receipt  A receipt issued by a person engaged in the business of storing goods for hire.
warrant  An order authorizing a payment of money by another person to a third person. Also, an option to purchase a security. As a verb, the word means to defend; to guarantee; to enter into an obligation of warranty.
warrant of arrest  A legal process issued by competent authority, usually directed to regular officers of the law, but occasionally issued to private persons named in it, directing the arrest of a person or persons on grounds stated therein.
warranty  An undertaking relating to characteristics of a thing being sold; a guaranty.
waste  The material alteration, abuse, or destructive use of property by one in rightful possession of it that results in injury to one having an underlying interest in it.
watered shares  Also called watered stock. Shares issued in exchange for property that has been overvalued. See bonus shares and discount shares.
will  A document executed with specific legal formalities that contains a person's instructions about the disposition of his property at his death.
winding up  In partnership and corporation law, the orderly liquidation of the business's assets.
writ  A commandment of a court given for the purpose of compelling certain action from the defendant, and usually executed by a sheriff or other judicial officer.
writ of certiorari  An order of a court to an inferior court to forward the record of a case for reexamination by the superior court.
wrongful use of civil proceedings  An intentional tort designed to protect against the wrongful initiation of civil proceedings.





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