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Abatement  Decrease, reduction, or diminution.
Acceptance  The contractual communication of agreeing to another's offer. The acceptance of an offer creates a contract.
Accession  Property acquired by adding something to an owned object.
Accessory  A term used at the state level that is similar to "aiding and abetting." Accessory to a crime generally is either before the criminal act or after it.
Accord and satisfaction  Payment of money, or other thing of value, usually less than the amount demanded, in exchange for cancellation of a debt that is uncertain in amount.
Actual authority  The authority a principal expressly or implicitly gives to an agent in an agency relationship. This authority may be written, spoken, or derived from the circumstances of the relationship.
Ad infinitum   Without limit; endlessly.
Adjudication  The judicial determination of a legal proceeding.
Adjustment  Under the Bankruptcy Act the procedure followed when a debtor's debts are partly reduced and partly rearranged for repayment.
Administrative agency  An organization, usually a part of the executive branch of government, that is created to serve a specific purpose as authorized by the legislative branch. An agency's function usually is characterized as quasi-legislative or quasi-judicial.
Administrative law  The legal principles involved in the workings of administrative agencies within the regulatory process.
Administrative law judge  The individual employed by an administrative agency who is in charge of hearing the initial presentations in a quasi-judicial case.
ADRs  An abbreviation for alternative dispute resolution systems that may be used in lieu of litigation.
Ad substantiation program  A program of the Federal Trade Commission under which the FTC demands that an advertiser substantiate any claims made in advertising. Even if the claims are not provably untrue, they are considered deceptive if they cannot be substantiated.
Ad valorem  According to value.
Adverse possession  Property ownership acquired through open, notorious, actual, exclusive, continuous, and wrongful possession of land for a statutorily prescribed period of time.
Advisory opinion  A formal opinion by a judge, court, regulatory agency, or law officer upon a question of law.
Affidavit  A sworn written statement made before an officer authorized by law to administer oaths.
Affirmative action  Positive steps taken in order to alleviate conditions resulting from past discrimination or from violations of a law.
Affirmative action program  A program designed to promote actively the position of minority workers with regard to hiring and advancement.
Affirmative defenses  Defenses that must be raised and proved by the defendant.
A fortiori   Even more clearly; said of a conclusion that follows with even greater logical necessity from another that is already included in the argument.
Agent  The person who on behalf of a principal deals with a third party.
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)  The WTO agreement that discusses the applicability of GATT principles and intellectual property agreements in the international sphere.
Aiding and abetting  A criminal action that arises from association with and from assistance rendered to a person guilty of another criminal act.
Alien corporation  A corporation created under the authority of a foreign country.
Alien Tort Claims Act (ATCA)  The federal law that grants jurisdiction to U.S. federal district courts over any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.
Alter-ego theory  One method used by courts to pierce the corporate veil when a shareholder fails to treat the corporate organization as a separate legal entity.
Amicus curiae   A friend of the court who participates in litigation though not a party to the lawsuit.
Annual percentage rate  A rate of interest that commercial lenders charge persons who borrow money. This rate is calculated in a standardized fashion required by the Truth-in-Lending Act.
Annuity  A contract by which the insured pays a lump sum to the insurer and later receives fixed annual payments.
Answer  The responsive pleading filed by a defendant.
Apparent authority  The authority that a third party in an agency relationship perceives to exist between the principal and the agent. In fact, no actual authority does exist. Sometimes also called ostensible authority.
Appeal  The right of the litigation parties to have the legal decisions of the trial judge reviewed by an appellate court.
Appellant  The party seeking review of a lower court decision.
Appellate court  A court that decides whether a trial judge has made a mistake of law.
Appellee  The party responding to an appeal; the winner in the trial court.
Apportionment  The concept used by states to divide a company's taxable income so that no one state burdens a company with an unfair tax bill.
Arbitration  Submission of a dispute to an extrajudicial authority for decision.
Arbitrator  The individual or panel members authorized by disputing parties to resolve a dispute through the arbitration process.
Arguendo   For the sake of argument.
Articles of incorporation  The legal document that forms the application for a state charter of incorporation.
Articles of organization  The document used to create a limited liability company. Its purpose corresponds to the purpose of the articles of partnership and the articles of incorporation.
Articles of partnership  Another name for a formally drafted partnership agreement.
Artisan's lien  The lien that arises in favor of one who has expended labor upon, or added value to, another person's personal property. The lien allows the person to possess the property as security until reimbursed for the value of labor or materials. If the person is not reimbursed, the property may be sold to satisfy the claim.
Assault  The intentional creation of immediate apprehension of injury or lack of physical safety.
Assignee  A third party, who is not an original contracting party, to whom contractual rights or duties or both are transferred. This party may enforce the original contract.
Assignment  A transfer of contractual rights.
Assignor  An original contracting party who assigns or transfers contractual rights or duties or both to a third party.
Assumed-name statute  A state law that requires partners to make a public filing of their identities if their partnership operates under a name that does not reveal the partners' identities.
Assumption of risk  Negligence doctrine that bars the recovery of damages by an injured party on the ground that such a party acted with actual or constructive knowledge of the hazard causing the injury.
Attachment  The term attachment has three meanings. First, attachment is a method of acquiring in rem jurisdiction of a nonresident defendant who is not subject to the service of process to commence a lawsuit. By "attaching" property of the nonresident defendant, the court acquires jurisdiction over the defendant to the extent of the value of the property attached. Second, attachment is a procedure used to collect a judgment. A plaintiff may have the property of a defendant seized, pending the outcome of a lawsuit, if the plaintiff has reason to fear that the defendant will dispose of the property before the court renders its decision. Third, attachment is the event that creates an enforceable security interest under the Uniform Commercial Code (UCC). In order that a security interest attach, there must be a signed, written security agreement, or possession of the collateral by the secured party; the secured party must give value to the debtor; and the debtor must maintain rights in the collateral.
Award  The decision announced by an arbitrator.
Bailee  In a bailment, the person who takes possession of an object owned by another and must return it or otherwise dispose of it.
Bailment  An owner's placement of an object into the intentional possession of another person with the understanding that the other person must return the object at some point or otherwise dispose of it.
Bailor  In a bailment, the person who transfers possession of tangible, personal property to another person with the understanding that the other person must return the object at some point or otherwise dispose of it.
Bait-and-switch promotion  An illegal promotional practice in which a seller attracts consumer interest by promoting one product, the "bait," then once interest has been attracted switches it to a second, higher-priced product by making the "bait" unavailable or unattractive.
Balance of trade  The difference between the amount of exports and imports of goods by a nation. A favorable balance would indicate more exports than imports. The United States has run an unfavorable balance of trade for several years.
Bank Merger Acts  Federal laws passed in 1960 and 1966 that require approval of the appropriate administrative agency prior to the merger of banks.
Bankruptcy  Traditionally, the financial condition where debts exceed assets and one is unable to pay debts as they mature.
Bankruptcy crime  An action involving the falsification of documents filed in a bankruptcy case.
Bargained for  A term used in conjunction with the requirement of contractual consideration to represent the exchange of benefits and burdens between the contracting parties.
Battery  The cause of action for physical contact that is not consented to and is offensive.
Beneficiary  A person entitled to the possession, use, income, or enjoyment of an interest or right to which legal title is held by another; a person to whom an insurance policy is payable.
Best evidence rule  A principle requiring that the original of a document be submitted to the court as proof of the document's contents.
Beyond a reasonable doubt  The burden of proof required in a criminal case. The prosecution in a criminal case has the burden of proving the defendant is guilty, and the jury must have no reasonable doubt about the defendant's guilt. See also Burden of proof.
Bilateral contract  An agreement that contains mutual promises, with each party being both a promisor and a promisee.
Bill of lading  A document issued by a carrier indicating that goods to be shipped have been received by the carrier.
Bill of particulars  In legal practice, a written statement furnished by one party to a lawsuit to another, describing in detail the elements upon which the claim of the first party is based.
Biodegradable  Capable of being decomposed by organic action.
Blue sky laws  Securities law enacted by States.
Bona fide   In good faith; innocently; without fraud or deceit.
Bona fide occupational qualification (BFOQ)  A qualification that permits discriminatory practices in employment if a person's religion, sex, or national origin is reasonably related to the normal operation of a particular business.
Brand  A marketing device that distinguishes one firm's products and services from another's. In general, brands are synonymous with trademarks under the law. See Trademark.
Breach of contract  A party's failure to perform some contracted-for or agreed-upon act, or failure to comply with a duty imposed by law.
Bribery  The offering, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties.
Brief  A written document produced by a party for a reviewing court that contains the facts, propositions of law, and argument of a party. It is in this document that the party argues the desired application of the law and any contentions as to the rulings of the lower court.
Browse-wrap agreement  An agreement proposed on a website that may be accepted by an explicit act, such as clicking an agreement button or simply using the service. Related forms are known as "click-wrap" and "shrink-wrap" agreements.
Bubble concept  A procedure by which the Environmental Protection Agency (EPA) allows a business to treat its entire plant complex as though encased in a bubble. The business suggests its own methods of cleanup, provided the total pollution does not exceed certain limits.
Bulk transfer  A transfer made outside the ordinary course of the transferor's business involving a major part of the business's inventory. Bulk transfers are subject to Article 6 of the Uniform Commercial Code (UCC).
Burden of proof  The term burden of proof has two meanings. It may describe the party at a trial with the burden of coming forward with evidence to establish a fact. The term also describes the party with the burden of persuasion. This party must convince the judge or jury of the disputed facts in issue or else lose that issue. There are various degrees of proof. See also Beyond a reasonable doubt, Preponderance of evidence, and Clear and convincing proof.
Burglary  Theft by breaking and entering.
Business judgment rule  A legal principle used by the courts to uphold the decisions of corporate directors and officers who have exercised good faith and due care in their business practices.
Business necessity defense  An affirmative defense under Title VII of the Civil Rights Act. It is raised to disparate impact claims and asserts that a facially neutral but discriminatory policy is job related.
Buy and sell agreement  A contract, usually among partners, but perhaps among shareholders, wherein one party agrees to buy the ownership interest held by another party or the first party agrees to sell such an interest to the other party. These contractual provisions help provide for a transition of owners without harming the business of the organization.
Buyer in the ordinary course of business  A buyer who buys from someone who ordinarily sells such goods in his or her business.
Capacity  Mental ability to make a rational decision that includes the ability to perceive and appreciate all relevant facts. A required element of a contract.
Cap and trade  A pollution policy that caps allowable pollution at a certain amount, distributes the rights to engage in that pollution, then allows the owners of the rights to trade them.
Case law  The legal principles that are developed by appellate judges through their written opinions. See Common law.
Categorical imperative  A concept by the philosopher Kant that a person should never act in a certain way unless he or she is willing to have everyone else act in the same way.
Caucus  The name used for a private meeting between a mediator and one of the parties involved in a mediation.
Cause in fact  The actual cause of an event; the instrument that is the responsible force for the occurrence of a certain event. A required element of a tort.
Cause of action  This phrase has several meanings, but it is commonly used to describe the existence of facts giving rise to a judicially enforceable claim.
Caveat emptor   Let the buyer beware; rule imposing on a purchaser the duty to inform him- or herself as to defects in the property being sold.
Caveat venditor   Let the seller beware; it is the seller's duty to do what the ordinary person would do in a similar situation.
Cease and desist order  The sanction that may be issued by an administrative agency to prevent a party from violating the law.
Celler-Kefauver amendment  Passed in 1950 to amend the Clayton Act by broadening the scope of Section 7 on mergers and acquisitions.
Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)  An agreement between the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic designed to eliminate trade barriers.
Certification mark  A mark used by someone other than its owner to certify the quality, point of origin, or other characteristic of goods or services. The Good Housekeeping "Seal of Approval" is an example.
Certiorari   A Latin word that means "to be informed of." This is the name of a writ that a higher court grants permitting the review of a lower court's ruling.
Changing conditions defense  A defense to a price discrimination (Section 2 of the Clayton Act) case wherein the defendant seeks to justify charging different customers different prices due to a change in the conditions of the product or marketplace.
Charter  The legal document issued by a state when creating a new corporation.
Circuit court  This term frequently is used to describe two distinct courts. First, the appellate courts in the federal court system often are called circuit courts of appeals. Second, the trial courts of general subject matter jurisdiction in some state court systems also are referred to as circuit courts.
Citation  The reference identifying how to find a case.
Civil law  The area of law governing the rights and duties between private parties as compared with the criminal law. This term also describes the system of codifying law in many countries as compared with the judicial orientation of the common law system.
Civil rights  The area of law designed to protect an individual's right to freedom from discrimination. In employment, this area of law prohibits unequal treatment based on race, color, national origin, religion, and sex.
Class-action suit  A method of litigation that allows one or more plaintiffs to file a lawsuit on behalf of a much larger group of persons, all of whom have a common interest in the claims being litigated.
Clayton Act  Legislation passed in 1914 that exempts labor unions from the Sherman Act. This law expanded the national antitrust policy to cover price discrimination, exclusive dealings, tying contracts, mergers, and interlocking directors.
Clean-hands doctrine  An equitable principle that requires a party seeking an equitable remedy to be free from wrongdoing.
Clear and convincing proof  A burden of proof that requires the party with the burden to establish clearly the existence of the alleged facts. This burden requires more proof than merely having a preponderance of evidence on one's side.
Closed shop  A contractual agreement between an employer and a union that all applicants for a job with the employer will have to join the union. This type of agreement was outlawed by the Taft-Hartley Act.
Closely held  An organization that is owned by only a few people.
Code  A compilation of legislation enacted by a federal, state, or local government.
Colgate doctrine  The legal principle that allows a form of vertical price fixing in that manufacturers may maintain the resale price of their products by announcing their pricing policy and refusing to deal with customers who fail to comply with the policy.
Collateral  The valuable thing put up by someone to secure a loan or credit.
Collective bargaining  The process used by an employer and a union representing employees to discuss and resolve differences so that the parties can agree to a binding contract.
Collective mark  A mark representing membership in a certain organization or association. The "union label" is an example.
Commerce clause  A provision in Article I, Section 8, of the U.S. Constitution that grants the federal government the power to regulate business transactions.
Commercial impracticability  A Uniform Commercial Code (UCC) defense to contractual nonperformance based on happenings that greatly increase the difficulty of performance and that violate the parties' reasonable commercial expectations.
Commercial speech  Speech that has a business-oriented purpose. This speech is protected under the First Amendment, but this protection is not as great as that afforded to noncommercial speech.
Common law  That body of law deriving from judicial decisions as opposed to legislatively enacted statutes and administrative regulations.
Comparable worth  Jobs that, although different, produce substantially equal value for the employer.
Comparative negligence  A doctrine that compares the plaintiff's contributory fault with the defendant's fault and allows the jury to reduce the plaintiff's verdict by the percentage of the plaintiff's fault.
Comparative responsibility  A doctrine that compares the plaintiff's contributory fault with the defendant's fault and allows the jury to reduce the plaintiff's verdict by the percentage of the plaintiff's fault. Also called comparative negligence.
Compensatory damages  Usually awarded in breach-of-contract cases to pay for a party's losses that are a direct and foreseeable result of the other party's breach. The award of these damages is designed to place the nonbreaching party in the same position as if the contract had been performed.
Complaint  In legal practice, the first written statement of the plaintiff's position and allegations, which initiates the lawsuit.
Complete performance  Degree of performance recognizing that each contracting party has performed every duty required by the contract.
Compulsory bargaining issue  Mandatory bargaining issue regarding wages, hours, or other terms or conditions of employment. Refusal to engage in good-faith bargaining with regard to these issues is an unfair labor practice.
Concealment  An intentional misrepresentation of a material fact occurring through the silence of a party.
Concerted activities  Those activities involving an agreement, contract, or conspiracy to restrain trade that may be illegal under the Sherman Antitrust Act.
Concurrent conditions  Mutual conditions under which each party's contractual performance is triggered by the other party's tendering (offering) performance.
Condition precedent  An event in the law of contracts that must occur before a duty of immediate performance of the promise arises. Contracts often provide that one party must perform before there is a right to performance by the other party. For example, completion of a job is often a condition precedent to payment for that job. One contracting party's failure to perform a condition precedent permits the other party to refuse to perform, cancel the contract, and sue for damages.
Condition subsequent  A fact that will extinguish a duty to make compensation for breach of contract after the breach has occurred.
Conduct  Under the Uniform Commercial Code (UCC) the conduct of contracting parties (i.e., their actions) is important in determining the meaning of a sales contract.
Confiscation  The seizure of property without adequate compensation.
Conflict  The common occurrence in life when two or more points of view exist.
Conflict of law  Rules of law the courts use to determine that substantive law applies when there is an inconsistency between laws of different states or countries.
Confusion  Property ownership that arises when identical masses of objects, such as grain, are mixed together.
Conglomerate merger  The merger resulting when merging companies have neither the relationship of competitors nor that of supplier and customer.
Consent order  Any court or regulatory order to which the opposing party agrees; a contract of the parties entered upon the record with the approval and sanction of a court.
Consequential damages  The amount of money awarded in a breach-of-contract case to the nonbreaching party to pay for the special damages that exceed the normal compensatory damages. Lost opportunities may create consequential damages if the breaching party was aware of the special nature of the contract.
Consequentialism  An ethical system that concerns itself with the moral consequences of actions. Also called teleology.
Consideration  An essential element in the creation of a contract obligation that creates a detriment to the promisee or a benefit to the promisor.
Consolidation  The process by which two or more corporations are joined to create a new corporation.
Conspiracy  A combination or agreement between two or more persons for the commission of a criminal act.
Constitution  When capitalized, the term refers to the U.S. federal Constitution, which sets out the basic framework for federal government and, as amended, for individual rights.
Constitutional law  The legal issues that arise from interpreting the U.S. Constitution or a state constitution.
Constitutional relativity  The idea that constitutional interpretation is relative to the time in which the Constitution is being interpreted.
Constructive discharge  The event of an employee resigning because the employer has made working conditions too uncomfortable for continued employment.
Consumer  An individual who buys goods and services for personal use rather than for business use.
Consumer Financial Protection Bureau (CFPB)  A federal regulatory agency established by the Consumer Financial Protection Act of 2010. The CFPB has authority over federal financial consumer law.
Consumer investigative report  A report on a consumer's character, general reputation, mode of living, etc., obtained by personal interviews in the community where the consumer works or lives.
Contempt of court  An order by a judge to punish wrongdoing with respect to the court's authority.
Contingency fee  An arrangement whereby an attorney is compensated for services in a lawsuit according to an agreed percentage of the amount of money recovered.
Contract  A legally enforceable promise.
Contract clause  The constitutional provision that prohibits states from enacting laws that interfere with existing contracts. The Supreme Court has refused to interpret this clause in an absolute manner.
Contract law  The law of legally enforceable promises.
Contribution  The right of one who has discharged a common liability to recover from another also liable the proportionate share of the common liability.
Contributory negligence  A failure to use reasonable care by the plaintiff in a negligence suit.
Controlling person  The person who has the control of, or is controlled by, the issuer of securities in securities laws.
Convention on the International Sale of Goods (CISG)  The agreement that sets forth standard international practices for the sale of goods.
Conversion  An unlawful exercise of dominion and control over another's property that substantially interferes with property rights.
Cooling-off period  A time provided by the Taft- Hartley Act during which labor and management must suspend the work stoppage (strike or lockout) and continue their working relationship while negotiating a resolution of the dispute. This period is for 80 days.
Copyright  A statutorily created property in creative expression that protects authors.
Corporate codes of conduct  Policy statements adopted by companies to define ethical standards for their conduct.
Corporate governance  A term that has at least two meanings. One relates to how business organizations are created and managed. A second concerns how the various levels of government regulate business organizations as they transact business.
Corporation  An artificial, but legal, person created by state law. As a business organization, the corporation's separation of owners and managers gives it a high level of flexibility.
Corrective advertising  A Federal Trade Commission (FTC) remedy that requires companies that have advertised deceptively to run ads that admit the prior errors and correct the erroneous information.
Cost justification defense  A defense to a price discrimination (Section 2 of the Clayton Act) case wherein the defendant seeks to justify charging different customers different prices due to that defendant's costs varying because of the differing quantities purchased by the customers.
Counterclaim  Any claim filed by the defendant in a lawsuit against the plaintiff in the same suit.
Counterdefendant  The party involved in litigation against whom a counterclaim is filed. This party is the original plaintiff.
Counteroffer  An offer made in response to another's offer. Usually made in place of an acceptance. A counteroffer usually terminates an offer.
Counterplaintiff  The party involved in litigation who files a counterclaim. This party is the original defendant who is making a claim against the original plaintiff.
Course of dealing  The way parties to a contract have done business in the past. Important in helping to determine the meaning of a contract for the sale of goods.
Courts of appeal  A court that reviews decisions by lower courts.
Covenant  An agreement or promise in writing by which a party pledges that something has been done or is being done. The term is often used in connection with real estate to describe the promises of the grantor of the property.
Covenant not to compete  An agreement in which one party agrees not to compete directly with the business of the other party; may be limited by geography or length of time.
Criminal law  That area of law dealing with wrongs against the state as representative of the community at large, to be distinguished from civil law, which hears cases of wrongs against persons.
Cross-examination  The process of questioning a witness by the lawyer who did not call the witness to testify on behalf of that lawyer's client.
Cruel and unusual punishment  Protection against such punishment is provided by the Eighth Amendment of the U.S. Constitution. To be cruel and unusual, the punishment must be disproportionately harsh when compared to the offense committed.
Damages  Monetary compensation recoverable in a court of law.
D.B.A.  Doing business as.
Decree  The decision of a court of equity.
Deed  A document representing the title or ownership of land.
Deeds of trust  A type of document to secure an extension of credit through an interest in the land.
Defamation  The publication of anything injurious to the good name or reputation of another.
Default  The failure of a defendant to answer a plaintiff's complaint within the time period allowed by the court. Upon the defendant's default, a judgment is entered in the plaintiff's favor.
Defect  Something that makes a product not reasonably safe for a use that can be reasonably anticipated.
Defendant  The party involved in a lawsuit that is sued; the party required to respond to the plaintiff's complaint.
Deficiency  In a land based security interest, the amount of the loan which remains unpaid after the land has been sold.
Defined benefit plan  A money-purchase plan that guarantees a certain retirement income based on the employee's service and salary under the Employee Retirement Income Security Act. The benefits are fixed, and the contributions vary.
Defined contribution plan  A money-purchase plan that allows employers to budget pension costs in advance under the Employee Retirement Income Security Act. The contribution is fixed, and the benefits vary.
Delivery  The physical transfer of something. In sale-of-goods transactions, delivery is the transfer of goods from the seller to the buyer.
Demurrer  A formal statement by the defendant that the facts alleged by the plaintiff are insufficient to support a claim for legal relief in common law pleading.
De novo judicial review  A proceeding wherein the judge or hearing officer hears the case as if it had not been heard before.
Deontology  An ethical system that affirms an absolute morality. Also called formalism.
Deposited acceptance rule  The contractual doctrine that a binding acceptance of an offer occurs when a mailed acceptance is irrevocably placed with the postal service.
Deposition  A discovery process outside the court's supervision that involves the sworn questioning of a potential witness. This oral questioning is reduced to a written form so that a record is established.
Derivative action  A lawsuit filed by a shareholder of a corporation on behalf of the corporation. This action is filed to protect the corporation from the mismanagement of its officers and directors.
Derivative suit  A lawsuit filed by one or more shareholders of a corporation against that organization's management. This suit is brought to benefit the corporation directly and its shareholders indirectly.
Design defect  A defect arising when a product does not meet society's expectation for a safely designed product.
Design patent  A property right awarded for a new, original and ornamental design for an article of manufacture.
Dicta  Statements made in a judicial opinion that are not essential to the decision of the case.
Digital Millennium Copyright Act  A 1998 federal law that provides a safe harbor from contributory copyright infringement for Internet service providers and creates liability for breaking the locks that protect copyrighted works.
Directed verdict  A motion for a directed verdict requests that the judge direct the jury to bring in a particular verdict if reasonable minds could not differ on the correct outcome of the lawsuit. In deciding the motion, the judge will view in the light most favorable to the nonmoving party, and if different inferences may be drawn by reasonable people, then the court cannot direct a verdict. In essence, a directed verdict removes the jury's discretion.
Direct examination  The process of questioning a witness conducted by the lawyer who called the witness to testify on behalf of that lawyer's client.
Directors  Those individuals who are elected by the shareholders to decide the goals and objectives for the corporate organization.
Disability  Any physical or mental impairment that substantially limits a major life activity.
Disaffirm  To void. Used to describe a minor's power to get out of a contract because of age.
Discharge  In bankruptcy the forgiving of an honest debtor's debts. In contract law an act that forgives further performance of a contractual obligation.
Discovery  Procedures by which one party to a lawsuit may obtain information relevant to the case from the other party or from third persons.
Discretionary function exception  An exception to the waiver of the doctrine of sovereign immunity. Officials of administrative agencies are exempt from personal liability if their performance or lack thereof is based on a discretionary function.
Discrimination in effect  The discriminatory result of policies that appear to be neutral.
Disparate impact  A term of employment litigation that refers to the disproportionate impact of a policy neutral on its face on some protected class (e.g., race or sex).
Disparate treatment  A term of employment litigation that refers to the illegal discriminatory treatment of an individual in some protected class (e.g., race or sex).
Dispute  The circumstance when a party in conflict claims the right to do or have something and the other party denies, rejects, or ignores the claim.
Dissolution  The cancellation of an agreement, thereby rescinding its binding force. A partnership is dissolved anytime there is a change in partners. A corporation's dissolution occurs when that business entity ceases to exist.
Diversity of citizenship  The plaintiffs filing a lawsuit must be from states different from those of the defendants. This requirement, along with over $75,000 at stake, is one method a federal court gains jurisdiction over the subject matter of a lawsuit.
Divestiture  The antitrust remedy that forces a company to get rid of assets acquired through illegal mergers or monopolistic practices.
Docket  A book containing a brief summary of all acts done in court in the conduct of each case.
Doctrine of abstention  A principle used by federal courts to refuse to hear a case. When used by the federal courts, the lawsuit involved is sent to the state court system.
Domestic corporation  A business organization created by the issuance of a state charter that operates in the state that issued the charter.
Domicile  That place that a person intends as his or her fixed and permanent legal residence; place of permanent abode, as contrasted with a residence, which may be temporary; a person can have a number of residences but only one domicile; the state of incorporation of a corporation.
Donee beneficiary  A noncontracting third party who receives as a gift the benefits of a contract made between two other parties. This third party is empowered to enforce the contract to ensure the receipt of the contract's benefits.
Dormant commerce clause concept  The impact of the commerce clause as a means of limiting state and local governments' powers to regulate business activities.
Double jeopardy  A constitutional doctrine that prohibits an individual from being prosecuted twice by the same governing body based on the same factual situation.
Double tax  A disadvantage of a corporate form of organization in that the corporation must pay a tax on the money earned and the shareholder pays a second tax on the dividends distributed.
Dram shop acts  Statutes adopted in many states that impose strict liability upon tavern owners for injuries to third parties caused by their intoxicated patrons.
Due diligence defense  A defense that experts may assert in a 1933 Securities Act case involving the failure to register securities or the failure to provide accurate documents. The expert utilizing this defense attempts to prove his or her reasonable investigation into all available information.
Due process  Fundamental fairness. As applied to judicial proceedings, adequate notice of a hearing and an opportunity to appear and defend in an orderly tribunal.
Due process clause  A provision found in the Fifth and Fourteenth Amendments of the U.S. Constitution. This clause assures all citizens of fundamental fairness in their relationship with the government.
Dumping  The practice of selling foreign goods in one country at less than the comparable price in the country where the goods originated.
Duress  Action by a person that compels another to do what he or she would not otherwise do. It is a recognized defense to any act that must be voluntary in order to create liability in the actor.
Duty  A legal obligation imposed by the law.
Duty of performance  In contract law the legal obligation of a party to a contract.
Duty of reasonable care  The legal duty owed under negligence doctrine.
Easement  The right of one other than the owner of land to some use of that land.
Economic boycott  Used in three basic forms (primary, secondary, and tertiary), a practice aimed at cutting off trade opportunities for enemy countries.
Eighty-day cooling-off period  A provision in the Taft-Hartley Act that allows the president to require that laborers continue working and that the laborers' representatives and management continue bargaining for at least 80 days during which it is intended that federal mediation will resolve the dispute. This provision can be utilized by the president only when there is a determination that the work stoppage is adversely affecting the national health and safety.
Ejusdem generis   Of the same kind or class; a doctrine of legislative interpretation.
Embezzlement  The fraudulent appropriation by one person, acting in a fiduciary capacity, of the money or property of another.
Eminent domain  The government's constitutional power to take private property for public use upon the payment of just compensation.
Emissions reduction banking  The policy stating that businesses that lower pollution beyond the requirements of the law may use the additional reductions in the future.
Employment at will  A hiring for an indefinite period of time.
En banc   Proceedings by or before the court as a whole rather than any single judge.
Endangerment of workers  A criminal act that involves placing employees at risk with respect to their health and safety in the work environment.
Enforceable contract  A contract that can be enforced in court.
Enjoin  To require performance of, or abstention from, some act through issuance of an injunction.
Environmental impact statement  A filing of documents required by the National Environmental Policy Act that forces governmental agencies to consider the environmental consequences of their actions.
Equal protection clause  A provision in the Fourteenth Amendment of the U.S. Constitution that requires all citizens to be treated in a similar manner by the government unless there is a sufficient justification for the unequal treatment.
Escrow  A deed, bond, or deposit that one party delivers for safekeeping by a second party who is obligated to deliver it to a third party upon the fulfillment of some condition.
Establishment clause  A provision in the First Amendment of the U.S. Constitution that prohibits the federal government from establishing any government-supported religion or church.
Estate  The bundle of rights and powers of real property ownership.
Estoppel  The legal principle that one may not assert facts inconsistent with one's own prior actions.
Ethics  A systematic statement of right and wrong together with a philosophical system that both justifies and necessitates rules of conduct.
European Union (EU)  Created by the Treaty of Rome, an organization that seeks to facilitate the free movement of goods, services, labor, professions, transportation, and capital among European countries.
Exclusive dealing  A buyer agrees to purchase a certain product exclusively from the seller or the seller agrees to sell all of his or her production to the buyer.
Exclusive remedy rule  The rule that limits an injured employee's claim against the employer to workers' compensation.
Exculpatory clause  A provision in a contract whereby one of the parties attempts to relieve itself of liability for breach of a legal duty.
Exculpatory contract  A contract that excuses one from accepting responsibility or blame. For example, a contract that excuses one from having to accept liability for one's negligence or another's injury or loss.
Exculpatory no  The doctrine that merely denying guilt is not a criminal lie in response to a question from an agency of the federal government. This doctrine is no longer valid.
Executed contract  A contract that is fully accomplished or performed, leaving nothing unfulfilled.
Execution  To carry out some action to completion. With respect to enforcing a court's judgment, an execution involves the seizure of the debtor's property, a sale of the property, and the payment of proceeds to the creditor.
Executory contract  An agreement that is not completed. Until the performance required in a contract is completed, it is executory.
Exemplary damages  Punitive damages. Monetary compensation in excess of direct losses suffered by the plaintiff that may be awarded in intentional tort cases where the defendant's conduct deserves punishment.
Exhaustion of remedies  A concept used in administrative law that requires any party to an administrative proceeding to give the administrative agency every opportunity to resolve the dispute before appealing to the court system.
Expectation of privacy  The expectation that one will not be observed by the state.
Experience rating system  A system of sliding taxation under which employers are charged less unemployment compensation tax as they lay off fewer workers due to economic conditions.
Export controls  Action taken on a national and multilateral basis to prevent the exportation of controlled goods and technology to certain destinations.
Express authority  Actual authority that arises from specific statements made by the principal to the agent.
Express conditions  Conditions that are explicitly set out in a contract.
Express contract  A contract in which parties show their agreement in words.
Express warranty  Any statement of fact or promise about the performance of a product made by a seller.
Expropriation  A foreign government's seizure of privately owned property.
Extortionate picketing  Picketing by employees in an attempt to force an employer to pay money to union officials or other individuals when these payments provide personal benefit to the officials or individuals instead of benefiting the union membership generally.
Extradition  The process that one state uses to have another state transfer to the jurisdiction of the first state a person accused of criminal activities.
Failing-company doctrine  A merger between a failing company and a competitor may be allowed, although such a merger would be illegal if both companies were viable competitors.
Fair Labor Standards Act (FLSA)  Originally passed in 1938, this law provides basic protections for employees, including the minimum wage and maximum number of hours before overtime must be paid.
Fair use  A statutorily permitted use of another's copyright for criticism, comment, news reporting, teaching, scholarship, or research.
False advertising  Untrue and fraudulent statements and representations made by way of advertising a product or a service.
False imprisonment  The tort of an intentional, unjustified confinement of a nonconsenting person who knows of the confinement.
Family and Medical Leave Act (FMLA)  This law, which became effective in 1993, allows eligible workers up to 12 weeks of unpaid leave in any 12-month period to care for a newborn baby, to care for a child placed for adoption or foster care, to care for an immediate family member with a serious health condition, or when the employee is unable to work because of a serious health condition.
Family resemblance test  A legal principle used to determine whether or not promissory notes or other similar investment opportunities are securities.
Featherbedding  A term used in the labor laws to describe workers who are paid although they do not perform any work. Under the Taft-Hartley Act, featherbedding is an unfair labor practice by unions.
Federal Employer's Liability Act  The federal act covering transportation workers that establishes an employer's liability to employees for negligence.
Federalism  A term used to describe the vertical aspect of the separation of powers. The coexistence of a federal government and the various state governments, with each having responsibilities and authorities that are distinct but overlap, is called federalism.
Federal question cases  Litigation involving the application or interpretation of the federal Constitution, federal statutes, federal treaties, or federal administrative agencies. The federal court system has subject matter jurisdiction over these issues.
Federal Rules of Civil Procedure  A law passed by Congress that provides the procedural steps to be followed by the federal courts when handling civil litigation.
Federal Trade Commission (FTC)  The federal regulatory agency that enforces the Federal Trade Commission Act of 1914 and various antitrust and consumer protection laws.
Federal Trade Commission Act  Passed in 1914, this legislation created the Federal Trade Commission (FTC) and authorized it to protect society against unfair methods of competition. The law was amended in 1938 (by the Wheeler-Lea amendment) to provide the FTC with authority to regulate unfair or deceptive trade practices.
Fee schedule  A plan, usually adopted by an association, that establishes minimum or maximum charges for a service or product.
Fee simple  The maximum bundle of rights, or estate, permitted by law.
Fellow-servant doctrine  The doctrine that precludes an injured employee from recovering damages from his employer when the injury resulted from the negligent act of another employee.
Felony  A criminal offense of a serious nature, generally punishable by death or imprisonment in a penitentiary; to be distinguished from a misdemeanor.
Fiduciary  One having a duty to act for another's benefit in the highest good faith.
Finance charge  Any charge for an extension of credit, which specifically includes interest, service charges, and other charges.
Financing statement  An established form that a secured party files with a public officer, such as a state official or local court clerk, to perfect a security interest under the Uniform Commercial Code (UCC). It is a simple form that contains basic information such as a description of the collateral, names, and addresses. It is designed to give notice that the debtor and the secured party have entered into a security agreement.
Firm offer  An offer in signed writing by a merchant to buy or sell goods; it gives assurances that the offer will be held open for acceptance under the Uniform Commercial Code (UCC).
Fixture  Personal property that has become real property, generally through physical attachment (annexation).
Focus group  A group acting as a mock jury; attorneys present cases to such a group to get the members' feedback on the merits of the various arguments presented.
Foreclosure  If a mortgagor fails to perform his or her obligations as agreed, the mortgagee may declare the whole debt due and payable, and she or he may foreclose on the mortgaged property to pay the debt secured by the mortgage. The usual method of foreclosure authorizes the sale of the mortgaged property at a public auction. The proceeds of the sale are applied to the debt.
Foreign corporation  A business organization, created by the issuance of a state charter, that operates in states other than the one issuing the charter.
Foreign Corrupt Practices Act (FCPA)  A U.S. law that seeks to ban the payment of bribes to foreign officials in order to obtain business.
Foreign Sovereign Immunities Act (FISA)  A federal law passed in 1976 that codifies the restrictive theory of sovereign immunity and rejects immunity for commercial acts carried on in the United States or having direct effects in this country.
Foreign subsidiary  A practice common in a multinational corporation that conducts part of its business operations in a foreign country.
Formalism  An ethical system that affirms an absolute morality. Also called deontology.
Forum non conveniens   The doctrine under which a court may dismiss a lawsuit in which it appears that for the convenience of the parties and in the interest of justice the action should have been brought in another court.
Franchise  A marketing technique whereby one party (the franchisor) grants a second party (the franchisee) the right to manufacture, distribute, or sell a product using the name or trademark of the franchisor.
Fraud  A false representation of fact made with the intent to deceive another that is justifiably relied upon to the injury of that person.
Free exercise clause  A provision in the First Amendment of the U.S. Constitution that allows all citizens the freedom to follow or believe any religious teaching.
Frolic and detour  The activity of an agent or an employee who has departed from the scope of the agency and is not, therefore, a representative of his or her employer.
Full faith and credit clause  A provision in the U.S. Constitution that requires a state to recognize the laws and judicial decisions of all other states.
Full-line forcing  An arrangement in which a manufacturer refuses to supply any portion of the product line unless the retailer agrees to accept the entire line.
Functional discount  A reduction in price as the result of the buyer's performing some service that usually is provided by the seller.
Garnishment  A legal proceeding whereby a creditor may collect directly from a third party who is obligated to the debtor.
General Agreement on Tariffs and Trade (GATT)  An international treaty that requires member countries to abide by the principles of open and free trade.
General counsel  An individual who is responsible for coordinating all law-related issues, such as the quasi-judicial hearings in administrative agencies. This term is also used to describe the principal lawyer of a company.
General partner  The owner of a limited partnership that enjoys the control of the partnership's operation. This type of partner is personally liable for the debts of the limited partnership.
General partnership  A business organization wherein all owners (partners) share profits and losses and all are jointly and severally liable for the organization's debts.
Generic  To lose distinctiveness in reference to the source of goods and thus to lose trademark protection.
Genetic Information Nondiscrimination Act (GINA)  Prohibits covered employers from firing, refusing to hire, or otherwise discriminating against individuals on the basis of their genetic information or a family member's genetic information.
Geographic extension merger  A combining of companies involved with the same product or service that do not compete in the same geographical regions or markets.
Geographic market  The relevant section of the country affected by a merger.
Gift  Transfer of ownership by intent and the delivery of the object gifted.
Going bare  A professional practicing (in her or his field of expertise) without liability insurance.
Good, the  In philosophy the moral goals and objectives that people choose to pursue.
Good faith  Honesty in dealing; innocence; without fraud or deceit.
Good-faith meeting-of-competition defense  A bona fide business practice that is a defense to a charge of violation of the Robinson-Patman Act. The Robinson-Patman Act is an amendment to the Clayton Act, which outlaws price discrimination that might substantially lessen competition or tends to create a monopoly. This exception allows a seller in good faith to meet the equally low price, service, or facility of a competitor. The good-faith exception cannot be established if the purpose of the price discrimination has been to eliminate competition.
Goods  Tangible (touchable), movable personal property.
Greenmail  Forcing a corporation to buy back some of its own stock at an inflated price to avoid a takeover.
Guardian  One charged with the duty of care and maintenance of another person such as a minor or incompetent under the law.
Guardian ad litem   A guardian appointed to prosecute or defend a lawsuit on behalf of an incompetent or a minor.
Guidelines  A result of an administrative agency's quasi-legislative function that assists parties being regulated to understand the agency's functions and intentions. Guidelines do not have the force of the law, but they can be helpful in anticipating the application of an agency's regulations.
Habeas corpus   The name of a writ that orders one holding custody of another to produce that individual before the court for the purpose of determining whether such custody is proper.
Hearsay evidence  Evidence of statements made or actions performed out of court that is offered to prove the truth thereof.
Hearsay rule  The exclusion, with certain exceptions, of hearsay evidence because of the lack of opportunity to cross-examine the original source of the evidence.
Holding  The precise legal response in an opinion by an appellate court on an issue of law raised on appeal.
Holder in due course  One who has acquired possession of a negotiable instrument through proper negotiation for value, in good faith, and without notice of any defenses to it. Such a holder is not subject to personal defenses that would otherwise defeat the obligation embodied in the instrument.
Horizontal merger  Merger of corporations that were competitors prior to the merger.
Horizontal price fixing  A per se illegal agreement among competitors as to the price all of them will charge for their similar products.
Horizontal territorial agreement  An arrangement between competitors with respect to geographical areas in which each will conduct its business to the exclusion of the others. This type of agreement is illegal per se under the Sherman Act.
Hostile working environment  Under Title VII an environment where co-workers make offensive sexual comments or propositions, engage in suggestive touching, show nude pictures, or draw sexual graffiti.
Hot-cargo contract  An agreement whereby an employer agrees to refrain from handling, using, selling, transporting, or otherwise dealing in the products of another employer or to cease doing business with any other person.
Illegal search and seizure  The area covered by the Fourth Amendment that protects individuals and organizations from unreasonable intrusion without a court-issued warrant.
Immunity  Status of exemption from lawsuits or other legal obligations.
Implied authority  Actual authority that is incidental to express authority.
Implied conditions  Conditions to a contract that are implied by law rather than by contractual agreement.
Implied contract  A legally enforceable agreement inferred from the circumstances and conduct of the parties. Also called an implied-in-fact contract.
Implied-in-fact contract  A legally enforceable agreement inferred from the circumstances and conduct of the parties.
Implied-in-law contract  A quasi-contract.
Implied warranty  A warranty implied by law rather than by express agreement of the parties to a contract.
Implied warranty of fitness for a particular purpose  An implied Uniform Commercial Code (UCC) warranty that arises when a buyer specifies a purpose for a product, then relies on the seller's skill and judgment to select the product.
Implied warranty of habitability  A warranty implied by law in a number of states that guarantees the quality of new home construction.
Implied warranty of merchantability  A warranty (implied) that the goods are reasonably fit for the general purpose for which they are sold.
Impossibility of performance  A defense to contractual nonperformance based on special circumstances that render the performance illegal, physically impossible, or so difficult as to violate every reasonable expectation the parties have regarding performance.
Incidental beneficiary  A person who may incidentally benefit from the creation of a contract. Such a person cannot enforce any right to incidental benefit.
Incorporators  Those individuals who are responsible for bringing a corporation into being.
Indefiniteness  When the terms of an agreement are not sufficiently specific, the agreement does not rise to the level of a contract because of the doctrine of indefiniteness.
Indictment  A document issued by a grand jury formally charging a person with a felony.
Individual retirement account  A retirement account for persons who can make either tax deductible contributions, which are taxed on withdrawal, or contributions that are taxed, which produce tax-free withdrawals. This latter type of account is known as a Roth IRA.
Industry guide  An issue of the Federal Trade Commission (FTC) defining the agency's view of the legality of an industry's trade practice.
Infliction of mental distress  An intentional tort of the emotions that causes both mental distress and physical symptoms as a result of the defendant's outrageous behavior.
Information  A written accusation by the prosecutor presented in court charging an accused person with a crime.
Infringement  The tort establishing violation of intellectual property rights.
Injunction  A court order directing a party to do or to refrain from doing some act.
Injurious falsehood  A statement of untruth that causes injury or damage to the party against whom it is made.
In pari materia   Concerning the same subject matter. A rule of statutory construction that two such statutes will be construed together.
In personam   The jurisdiction of a court to affect the rights and duties of a specific individual.
In rem   The jurisdiction of a court to affect property rights with respect to a specific thing.
Insider  A person who owns 10 percent or more of a company or who is a director or officer of the company; a term used in securities law. This term is also used to describe a person possessing nonpublic information.
Intangible property  Something that represents value but has no physical attributes, such as a copyright, patent, or franchise right.
Intellectual property  A type of property in information and its application or expression. Patents and copyrights are examples.
Intent  A legal doctrine indicating that parties meant to do what they did.
Intentional interference with contractual relations  The tort of causing another to break a contract.
Intentional tort  Noncontractual legal wrong caused by one who desires to cause the wrong or where the wrong is substantially likely to occur from the behavior.
Intent to defraud  Applies to an individual who knowingly and willfully makes a misrepresentation of a material fact that is relied on and thereby causes injury or harm.
Interference with contractual relations  A business tort in which persons are induced to breach binding agreements.
International Court of Justice  The judicial branch of the United Nations, which sits at The Hague in the Netherlands and consists of 15 judges representing the world's major legal systems.
International Monetary Fund  An international economic organization.
Interpleader  A legal procedure by which one holding a single fund subject to conflicting claims of two or more persons may require the conflicting claimants to come into court and litigate the matter between themselves.
Interrogatory  A written question submitted by one party to another in a lawsuit; a type of discovery procedure.
Inter se   Between themselves.
Intestate  A person who dies without a will.
Invasion of privacy  A tort based on misappropriation of name or likeness, intrusion upon physical solitude, or public disclosure of objectionable, private information.
Investigative consumer report  A consumer report under the Fair Credit Reporting Act that arises when a credit reporting agency goes beyond reporting financial transactions and also reports the habits and practices of someone seeking credit or a job.
Involuntary petition  The document filed by a creditor to initiate bankruptcy proceedings against a debtor.
Irreconcilable conflicts  When a state or local law requires something different than a federal law or regulation and both laws cannot be satisfied. Under Commerce Clause analysis, the state or local law is declared invalid and void.
Irrevocable letter of credit  Reduces the risk to parties in cases where business is extended across national borders between strangers by providing guarantees of payment and delivery of goods.
Issuer  The term in securities law for an individual or business organization offering a security for sale to the public.
Jointly and severally liable  The legal principle that makes two or more people, usually partners, liable for an entire debt as individuals or in any proportional combination.
Joint tenancy  A property ownership that is undivided (common) and equal between two or more owners. Permits survivorship.
Joint venture  Two or more persons or business organizations agreeing to do business for a specific and limited purpose.
Judgment  Official adjudication of a court of law.
Judgment notwithstanding the verdict  The decision of a court that sets aside the verdict of a jury and reaches the opposite result.
Judgment on the pleadings  A principle of litigation, in the form of a motion, whereby one party tests the validity of the allegations contained in the complaint and answer. Upon this motion a judge might determine that the pleadings contain no issues of fact or law and thus grant a judgment prior to a trial.
Judicial activism  An activist judge tends to abide by the following judicial philosophies: (1) The political process cannot adequately handle society's difficult issues; (2) the courts can correct society's ills through the decision-making process; (3) following precedent is not crucial; and (4) "judge-made law" is often necessary to carry out the legislative intent of the law. See also Judicial restraint.
Judicial admission  An exception under the statute of frauds allowing courts to enforce oral contracts when a party acknowledges the oral promise in a formal judicial/court environment.
Judicial restraint  A judge who abides by the judicial restraint philosophy (1) believes that the political process, and not the courts, should correct society's ills; (2) decides an issue on a narrow basis, if possible; (3) follows precedent whenever possible; and (4) does not engage in "judge-made law" but interprets the letter of the law. See also Judicial activism.
Judicial review  The power of courts to declare laws enacted by legislative bodies and actions by the executive branch to be unconstitutional.
Jurisdiction  The power and authority of a court or other governmental agency to adjudicate controversies and otherwise deal with matters brought before it.
Jurisdictional strike  A stoppage of work that arises from a dispute between two or more unions as to what work should be assigned to the employees belonging to the disputing unions. This work stoppage is an unfair labor practice. This dispute between the unions should be resolved by the NLRB.
Jurisprudence  The science of the law; the practical science of giving a wise interpretation of the law.
Jury instruction  A statement made by the judge to the jury informing them of the law applicable to the case the jury is bound to accept and apply.
Kickbacks  Payments made to a person who has facilitated a transaction.
Knowingly  Intentionally.
Laches  Defense to an equitable action based on the plaintiff's unreasonable delay in bringing the action.
Landrum-Griffin Act  The federal law passed in 1959 that provides union members with a "Bill of Rights" and requires union officers to file reports with the Department of Labor. This law, which is known as the Labor-Management Reporting and Disclosure Act, also added unfair labor practices by unions.
Land sales contract  A type of document to secure an extension of credit through an interest in the land purchased.
Lanham Act  A federal law regulating unfair methods of competition regarding trademarks.
Larceny  The unlawful taking of personal property with the intent to deprive the right owner of this property.
Law  The rules of the state backed up by enforcement.
Law of agency  That body of law concerning one's dealing with another on behalf of a principal.
Law of nations  The law embodied in international agreements, treaties, and conventions.
Leading question  A question that indicates the appropriate answer because of the way or manner in which it is asked. Typically, such questions are allowed during the cross-examination of a witness but not during the direct examination.
Leashold estate  The property granted to tenants (lessees) by a landlord (lessor).
Legacy  A gift of money under a will. It is a type of bequest, which is a gift of personal property. The word devise is used in connection with real property distributed by will.
Legal capacity  The ability of a business organization to sue and be sued in its own name rather than having to sue or be sued in the name of its owners.
Legal clinic  A term referring to a law firm that specializes in low-cost, generally routine legal procedures.
Legislation  Laws passed by an elected body such as Congress, a state legislation, or local council/ commission. Those laws enacted at the federal and state levels are called statutes. At the local level, such laws are often referred to as ordinances.
Legislative history  A technique used by courts in interpreting statutes. Courts often examine the record of the legislators' debate in an attempt to determine what was intended by the legislation.
Letter of credit  A document commonly used in international transactions to ensure payment and delivery of goods.
Libel  A defamatory written statement communicated to a third party.
License  A common method of controlling product or technology transfers across national borders.
Lien  A claim to an interest in property in satisfaction of a debt or claim.
Life estate  A property that grants land ownership for the lifetime of a specified person.
Limited liability  This term is used to describe the exposure of business owners to pay the debts of their businesses when such exposure does not exceed the owner's investment in the business.
Limited liability company (LLC)  A type of business organization that has characteristics of both a partnership and a corporation. The owners of an LLC are called members, and their personal liability is limited to their capital contributions. The LLC, as an organization, is not a taxable entity.
Limited liability partnership  A hybrid business partnership.
Limited partners  Those owners of a limited partnership who forgo control of the organization's operation in return for their liability being limited to the amount of their investment.
Limited partnership  A partnership in which one or more individuals are general partners and one or more individuals are limited partners. The limited partners contribute assets to the partnership without taking part in the conduct of the business. Such individuals are liable for the debts of the partnership only to the extent of their contributions.
Limited personal liability  See Limited liability.
Liquidated damages clause  A contractual provision that specifies a predetermined amount of damages or a formula for such a determination to be utilized if a breach of contract occurs.
Liquidation  The process of winding up the affairs of a business for the purpose of paying debts and disposing of assets. May be voluntary or under court order.
Litigation  The process of utilizing the court system to resolve a legal dispute.
Long-arm statute  A state statute that gives extraterritorial effect to process (summon) in specified cases. It allows state courts to obtain jurisdiction in civil actions over defendants who are beyond the border of the state provided the defendants have minimum contact with the state sufficient to satisfy due process.
Mailbox rule  The rule that an acceptance is effective once it is sent. See Deposited acceptance rule.
Mail fraud  The use of the United States Postal Service or any interstate carrier to conduct fraudulent activities with the intent to deprive an owner of property.
Malfeasance  Doing of some wrongful act.
Malice  The state of mind that accompanies the intentional doing of a wrongful act without justification or excuse.
Malicious prosecution  An action for recovery of damages that have resulted to person, property, or reputation from previous unsuccessful civil or criminal proceedings that were prosecuted without probable cause and with malice.
Manager  A person designated and charged with day-to-day operations of a Limited Liability Company.
Mandamus  A court order directing the holder of an office to perform his or her legal duty.
Mandatory arbitration  A form of resolving a dispute, as an alternative to litigation, that is required by a statute.
Manifest system  A documentary system required by the Resource Conservation and Recovery Act. Used in the disposal of toxic chemicals.
Market extension merger  An acquisition in which the acquiring company increases its market through product extension or geographical extension.
Master  The term used in an agency relationship to describe the principal (employer) of a servant (employee) who is involved in a tort.
Material breach  A level of performance below what is reasonably acceptable. A substantial failure, without excuse, to perform a promise that constitutes the whole or part of a contract. A party who has materially breached cannot sue the other party for performance and is liable for damages.
Mayhem  Unlawfully depriving a human being of a member of his or her body.
Mechanic's lien  A lien on real estate that is created by statute to assist suppliers and laborers in collecting their accounts and wages. Its purpose is to subject the owner's land to a lien for material and labor expended in the construction of buildings and other improvements.
Med-Arb  An abbreviation for an alternative dispute resolution system that involves parties going through mediation and agreeing to resolve as many issues as possible. These parties agree that any matters not resolved in the mediation process will then be arbitrated.
Mediation  An alternative to litigation whereby a third party attempts to assist the disputing parties in reaching a settlement. The third-party mediator lacks authority to impose on the parties a binding solution to the dispute.
Mediator  An individual who assists disputing parties in their efforts to resolve their differences. Mediators must rely on their persuasive abilities since they have no authority to settle the dispute.
Members  The individuals or business entities that belong to a limited liability company.
Merchant  A term used in the Uniform Commercial Code to describe parties to a contract that regularly do business in the goods being sold and purchased.
Merger  The extinguishment of a corporate entity by the transfer of its assets and liabilities to another corporation that continues in existence.
Minimum rationality  A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that there is a good reason for the government's action.
Minimum wage  Minimum hourly wages, established by Congress under the Fair Labor Standards Act, to maintain the health, efficiency, and general well-being of workers.
Ministerial duty  An example of a definite duty regarding that nothing be left to discretion or judgment.
Minitrial  An alternative dispute resolution system that involves lawyers presenting both sides of a business dispute to the executives of the organizations involved.
Mirror image rule  The common law rule that the terms of an acceptance offer must mirror exactly the terms of the offer. Any variation of terms would make the attempted acceptance a counteroffer.
Misappropriation  A term referring to the wrongful taking of what belongs to an owner. Often used in intellectual property law.
Misappropriation theory  The legal doctrine supported by the Securities and Exchange Commission (SEC) and the courts that any person who shares nonpublic information with another party or who trades on the information violates the securities laws if that information was intended to be kept confidential.
Misdemeanor  A criminal offense of less serious nature than a felony, generally punishable by fine or jail sentence other than in a penitentiary.
Misfeasance  A misdeed or trespass.
Misrepresentation  An untrue manifestation of fact by word or conduct; it may be unintentional.
Mitigate  To lessen the consequences of. Usually used to refer to the contractual duty to lessen damages following breach of contract.
Mock trial  An alternative dispute resolution system that involves lawyers presenting their clients' cases to a group of citizens who render their opinion about the relative merits of the parties' positions.
Monopoly  Exclusive control of a market by a business entity.
Morality  The values of right and wrong.
Mortgage  1. A transfer of an interest in property for the purpose of creating a security for a debt. 2. A type of security interest in land, usually securing an extension of credit.
Mortgagor  The owner of land who places a mortgage on it.
Motion  The process by which the parties make written or oral requests that the judge issue an order or ruling.
Mutual assent  A contractual doctrine requiring that the minds of the contracting parties must meet before there exists a binding contract.
Mutual mistake  A situation in which parties to a contract reach a bargain on the basis of an incorrect assumption common to both parties.
Nationalization  A claim made by a foreign government that it owns expropriated property.
National Labor Relations Board (NLRB)  The federal administrative agency created in 1935 to conduct certification/decertification elections of unions and to conduct quasi-judicial hearings arising from the labor-management relationship.
National Mediation Board  Created by the Railway Labor Act, this federal agency is to help the parties resolve labor-management disputes arising in transportation industries.
Natural law  A philosophy of law that says certain legal rules can be reasoned out from nature itself and always hold true.
Necessaries of life  Food, clothing, shelter, medical care, and, in some states, education. A minor is legally responsible to pay a reasonable value for purchased necessaries of life.
Negligence  A person's failure to exercise reasonable care that foreseeably causes another injury.
Negotiable instrument or document  A special type of written promise to pay money (instrument) or deliver goods (document). Personal defenses do not apply against the holder in due course of a negotiable instrument or document.
Negotiated settlement  A voluntary but binding agreement that settles a legal dispute, such as one involving a contractual breach or a tort lawsuit.
Negotiation  The process used to persuade or coerce someone to do or to stop doing something.
Nexus  A logical connection.
NLRB  National Labor Relations Board.
Noerr-Pennington doctrine  This doctrine exempts from the antitrust laws concerted efforts to lobby government officials regardless of the anticompetitive purposes. It is based on the First Amendment freedom of speech.
No-fault laws  Laws barring tort actions by injured persons against third-party tortfeasors and requiring such persons to obtain recovery from their own insurers.
Nolo contendere   A plea entered by the defendant in a criminal case that neither admits nor denies the crime allegedly committed but, if accepted by the court, permits the judge to treat the defendant as guilty.
Nonprofit corporation  A corporation that must return all profits to the organization for use in future operations. Such corporations are often exempt from federal income tax.
Nontrading partnership  A business organization made up of two or more partners engaged in buying and selling goods.
Norris-LaGuardia Act  The federal legislation adopted in 1932 that attempted to increase union membership by prohibiting the use of injunctions issued by federal courts against certain union activities and by outlawing yellow-dog contracts.
North American Free Trade Agreement (NAFTA)  An agreement reached in 1993 among the United States, Mexico, and Canada to increase economic growth through mutual trade.
Noscitur a sociis   The principle that the scope of general words is defined by specific accompanying words; a doctrine of legislative interpretation.
Notary public  A public officer authorized to administer oaths and certify certain documents.
Notice  Communication sufficient to charge a reasonable person with knowledge of some fact.
Novation  The substitution of a new contract in place of an old one.
Nuisance  A physical condition constituting an unreasonable and substantial interference with the rights of individuals or the public at large.
Obligee  One who is entitled to receive a payment or performance under a contract.
Obligor  One who is obligated to pay or perform under a contract.
Obstruction of justice  A criminal act involving the interference of the administration of the laws during the investigations and conduct of trials.
Occupational Safety and Health Administration (OSHA)  The organization that has jurisdiction over complaints about hazardous conditions in the workplace.
Offer  A contractual communication that contains a specific promise and a specific demand. The offer initiates the process of making a contract.
Officers  Those individuals appointed by directors of a corporation to conduct the daily operations of the corporate organization.
Oligopoly  Control of the supply and price of a commodity or service in a given market by a small number of companies or suppliers.
Opinion  The decision of a judge, usually issued in a written form.
Option  A contractual arrangement under which one party has for a specified time the right to buy certain property from or sell certain property to the other party. It is essentially a contract to not revoke an offer.
Oral argument  Attorneys appear in person before the appellate court to explain orally to the court their position in the case and answer the court's questions about the case.
Ordinance  The legislative enactment of a city, county, or other municipal corporation.
Organizers  The parties responsible for bringing a limited liability company into existence. These parties correspond to the functions of incorporators with respect to corporations.
Overbreadth doctrine  A principle used by courts to invalidate legislation that is broader in scope than is necessary to regulate an activity. This doctrine may be utilized to protect constitutional rights, such as freedom of speech, against a wide sweep of some governmental action.
Overt act  An essential element of a crime. Without this action by a party, the intent to engage in criminal activity is not wrongful.
Ownership  The term refers to the exclusive legal right to possess, transfer, and use resources. It is a synonym for "property."
Paper fortress  A term referring to the documentation an employer should keep about an employee's performance.
Parker v. Brown doctrine  The name given to the state action exemption to the Sherman Act. See also State action exemption.
Parol evidence  Legal proof based on oral statements; with regard to a document, any evidence extrinsic to the document itself.
Parol evidence rule  Parol evidence is extrinsic evidence. In contracts, the parol evidence rule excludes the introduction of evidence of prior written or oral agreements that may vary, contradict, alter, or supplement the present written agreement. There are several exceptions to this rule. For example, when the parties to an agreement do not intend for that agreement to be final and complete, then parol evidence is admissible.
Partnership  A business organization involving two or more persons agreeing to conduct a commercial venture while sharing its profits and losses.
Part performance  The contractual doctrine that says when a buyer of land has made valuable improvements in it or has paid part or all of the purchase price, the statute of frauds does not apply to prevent an oral land sales contract from being enforceable.
Patent  A statutorily created property in inventions and discoveries. See Utility patent, Design patent, and Plant patent.
Pattern of racketeering  Under RICO, two or more similar acts of organized crime in a ten year period.
Pay-for-play  A term referencing the need for one to have to pay to get performed a duty that an official, frequently a government official, is already obligated to perform, for example, an appointment by the official. Pay for play usually indicates official corruption.
Per capita  By or for each individual.
Per curiam   By the court; said of an opinion expressing the view of the court as a whole as opposed to an opinion authored by any single member of the court.
Peremptory challenge  The power granted each party to reject a limited number of potential jurors during voir dire examination. No reason for the rejection need be given.
Perfection  The status ascribed to security interests after certain events have occurred or certain prescribed steps have been taken, e.g., the filing of a financing statement.
Perjury  The giving of false testimony under oath.
Per se  In itself.
Per se illegality  Under the Sherman Act, agreements and practices are illegal only if they are unreasonable. The practices that are conclusively presumed to be unreasonable are per se illegal. If an activity is per se illegal, only proof of the activity is required, and it is not necessary to prove an anticompetitive effect. For example, price fixing is per se illegal. See also Rule of reason.
Personal jurisdiction  The power of a court over the parties involved in the litigation process.
Personal property  All property that does not involve land and interests in land.
Petitioner  The party filing either a case in equity or a petition for a writ of certiorari before a supreme court.
Petit jury  The fact-finding body during a trial. Also called a trial or traverse jury.
Petty offenses  Criminal acts that are viewed as minor and thus are typically punished by a fine only.
Piercing the corporate veil  The legal doctrine used by courts to disregard the existence of a corporation, thereby holding the shareholders personally liable for the organization's debts.
Plaintiff  The person who initiates a lawsuit.
Plan termination insurance  The insurance required by federal law on regulated pension plans. It protects against plan termination that leaves pension benefits underfunded.
Plant patent  A property right awarded for a new variety of plant that can be produced asexually. Note that inventions involving plants may be protected as utility patents. See Utility patent.
Pleadings  The system for defining and narrowing the issues by parties who file formal documents stating their respective positions in a lawsuit.
Plenary  Entire; complete in all respects.
Point source  Any source of air pollution that must be licensed under the Clean Air Act.
Police power  The authority a state or local government has to protect the public's health, safety, morals, and general welfare.
Positional bargaining  A method of negotiation that focuses on the parties exchanging offers, with concessions being made so that parties find a middle ground. The seller refers to the last offer made as its bottom line, and the buyer refers to the last offer made as its top dollar.
Possession  Dominion and control over property; the holding or detention of property in one's own power or command.
Postdispute arbitration clause  Can be applicable to arbitration, mediation, or other methods of ADR; such a clause is signed by parties that are already in dispute.
Posteffective period  As it relates to an initial public offering of securities, this is the period during which the securities may by sold. This period usually follows a twenty-day waiting period.
Precedent  A prior judicial decision relied upon as an example of a rule of law.
Predatory conduct  An anticompetitive action that is intended to drive competitors out of business. A common example occurs when a business lowers its prices in the hope of gaining such a large market share that it can then raise prices without the fear of competition.
Predatory pricing  A policy of lowering the price charged to customers for the purpose of driving competitors out of business. Typically, this policy involves prices that are below the seller's costs of the products sold with resulting losses to the seller.
Predispute arbitration clause  Applicable to ADR systems agreed to by contracting parties prior to a dispute arising; usually this clause is a part of the original contract between the parties.
Preemption  A condition when a federal statute or administrative rule governs an issue to the extent that a state or local government is prohibited from regulating that area of law.
Preemptive right  A corporation's shareholder's right to maintain the same percentage ownership of the organization whenever newly authorized stock is sold.
Preferred stock  A type of stock issued by a corporation that entitles the owner to receive a dividend before owners of common stock.
Prefiling period  As it relates to an initial public offering of securities, this is that period of time prior to the filing of a registration statement with the SEC.
Prejudicial error  An error in judicial proceedings that may have affected the result in the case.
Preponderance of evidence  In the judgment of the jurors, evidence that has greater weight and overcomes the opposing evidence and presumptions.
Presumption of innocence  The basis of requiring the government to prove a criminal defendant's guilt beyond a reasonable doubt.
Prevention of significant deterioration  A rule implemented under the Clean Air Act that prohibits the degradation of air quality in regions where air quality is better than required by primary air quality standards.
Price discrimination  A seller charging different purchasers different prices for the same goods at the same time.
Price fixing  An agreement or combination by which the conspirators set the market price, whether high or low, of a product or service whether being sold or purchased.
Prima facie   On the face of it; thus, presumed to be true unless proved otherwise.
Primary air quality standards  The standards necessary to protect human health. Secondary air quality standards are stricter standards necessary to protect various environmental amenities.
Primary jurisdiction  A doctrine used by reviewing courts to determine whether a case is properly before the courts or whether it should be heard by an administrative agency first since such an agency might have expertise superior to the courts'.
Principal  The person who gives an agent authority.
Principled, interest-based, negotiations  A method of negotiation that focuses on the parties' interests as opposed to positions. The language used to describe this bargaining includes options, alternatives, objective criteria, and relationships.
Prior consideration  Service or gift from the past that presently induces one to make a promise. Prior consideration does not enable that promise to bind one. It is not legal consideration.
Prior restraint  A principle applicable under the freedom of press and speech clauses of the First Amendment of the U.S. Constitution. The courts have announced decisions that encourage governments to allow the publication or expression of thoughts rather than to restrain such thoughts in advance of their publication or expression.
Private international law  A body of rules that deal with controversies between private persons, such as those created by commercial transactions.
Private law  A classification of legal subject matters that deals most directly with relationships between legal entities. The law of contracts and the law of property are two examples of this classification.
Private nuisance  An unreasonable use of one's land so as to cause substantial interference with the enjoyment or use of another's land.
Private Securities Litigation Reform Act (PSLRA)  A 1995 federal statute that limits the recovery for securities violations against third parties who are not directly responsible for the violation. For example, only the Securities and Exchange Commission can pursue these claims. This law also requires lead plaintiffs in class-action securities suits and restricts recovery of damages and attorneys fees.
Privilege  A special advantage accorded by law to some individual or group; an exemption from a duty or obligation generally imposed by law.
Privileged communication  A rule of evidence that protects conversations that society deems to be confidential. For example, a witness cannot be required to disclose communications between an attorney and a client.
Privileges and immunities clause  A provision found in Article IV and the Fourteenth Amendment of the U.S. Constitution that prevents a state government from discriminating in favor of its citizens and against citizens from another state. This clause, while not interpreted to be absolute, has emphasized national rather than state citizenship.
Privity  Interest derived from successive relationship with another party; a contractual connection.
Probable cause  The reasonable basis on which law enforcement officials convince a judge that criminal activity has occurred. This is the basis that must be satisfied before a judge will issue a criminal search warrant.
Procedural due process  The process or procedure ensuring fundamental fairness that all citizens are entitled to under the U.S. Constitution.
Procedural law  The body of rules governing the manner in which legal claims are enforced.
Product extension merger  A merger that extends the products of the acquiring company into a similar or related product but one that is not directly in competition with existing products.
Production defect  A defect arising when a product does not meet its manufacturer's own standards.
Product liability  The liability that sellers have for the goods they sell.
Prohibiting discrimination  A standard of review under the Commerce Clause that can invalidate state and local laws. When state and local laws discriminate against or negatively impact interstate commerce, such laws are invalid and void.
Promise  A commitment or willingness to be bound to a contract obligation.
Promissory estoppel  Court enforcement of an otherwise unbinding promise if injustice can be avoided only by enforcement of the promise. A substitute for consideration.
Property  A bundle of private, exclusive rights in people to acquire, possess, use, and transfer scarce resources.
Property law  The law of the legal fence that establishes exclusive right in someone called an owner.
Proportionality review  The process that appellate courts use to determine the appropriateness of a criminal sentence.
Prospectus  The legal document required by the 1933 Securities Act to be made available to potential purchasers of securities.
Pro tanto   So far as it goes.
Proximate causation  The doctrine that limits an actor's liability to consequences that could reasonably be foreseen to have resulted from the act.
Protestant ethic  A set of beliefs urging that human desire and indulgence be bent to God's will through hard work, self-denial, and rational planning.
Proximate cause  In tort law and legal requirement that an act foreseeably causes an injury.
Proxy  The legal document whereby a shareholder appoints an agent to vote the stock at a corporation's shareholders' meeting.
Public international law  A body of rules that examines relationships among nations and seeks to bind them to common principles in the international community.
Public law  A classification of legal subject matters that regulates the relationship of individuals and organizations to society.
Publicly held  A business organization that has hundreds, if not thousands, of owners who can exchange their ownership interests on public exchanges.
Public nuisance  An owner's use of land that causes damage or inconvenience to the general public.
Public policy  Accepted standards of behavior. For instance, a contract is illegal if it violates public policy.
Punitive damages  Monetary damages in excess of a compensatory award, usually granted only in intentional tort cases where defendant's conduct involved some element deserving punishment. Also called exemplary damages.
Purchase money security interest (PMSI)  A security interest given to the party that loans the debtor the money that enables the debtor to buy the collateral.
Qualified disabled  A disabled person who can perform the duties of a job.
Qualified pension plan  A private retirement plan that gains favorable income tax treatment from the Internal Revenue Service (IRS). A qualified pension plan allows for the deduction of contributions made to fund the plan. Also, earnings from fund investments are not taxable, and employees defer personal income tax liability until payments are received after retirement. To qualify, the plan must cover a high percentage of workers (usually 70 percent) or cover classifications of employees that do not discriminate in favor of management or shareholders.
Quantity discount  The practice of giving a lower per unit price to businesses that buy a product in volume than to their competitors that do not.
Quasi-contract  A quasi-contract, often referred to as an implied-in-law contract, is not a true contract. It is a legal fiction that the courts use to prevent unjust enrichment and wrongdoing. Courts permit the person who conferred a benefit to recover the reasonable value of that benefit. Nonetheless, the elements of a true contract are not present.
Quasi-judicial  Administrative actions involving factual determinations and the discretionary application of rules and regulations.
Quasi-legislative  This term describes the rulemaking functions of administrative agencies.
Quasi-strict scrutiny  A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that the purpose of the action is substantially related to an important governmental objective.
Quick-look analysis  A process of review used by courts in antitrust cases to determine the legality of an anticompetitive act. This analysis is something greater than the per se determination of illegality and less than the full consideration of the rule of reason analysis.
Quid pro quo   The exchange of one thing of value for another.
Quitclaim deed  The transfer by deed of all the grantor's rights, title, and interest in property.
Quo warranto   An action brought about by the government to test the validity of some franchise, such as the privilege of doing business as a corporation.
Racketeering  A crime under RICO involving a pattern of actions that are indictable under state or federal laws.
Railway Labor Act  The federal law passed in 1926 to encourage collective bargaining in the railroad industry. The law also created the National Mediation Board.
Ratification  What occurs when a principal voluntarily decides to honor an agreement.
Ratio decidendi   Logical basis of judicial decision.
Real property  Property in land and interests in land.
Reasonable accommodation  The actions that an employer must take under Title VII of the Civil Rights Act and under the Americans with Disabilities Act to adapt employment conditions to an employee's religious belief or disability.
Reciprocal dealing  A contract in which two parties agree to mutual actions so that each party can act as both a buyer and a seller. The agreement violates the Clayton Act if it results in a substantial lessening of competition.
Redlining  An act or refusal to act that results in a discriminatory practice. For example, refusing to make loans in low-income areas can discriminate against minorities in granting credit.
Reformation  A contractual remedy exercised by a court to correct a mistake of drafting or some other nonessential mistake. After reformation the parties remain bound to the contract.
Registration statement  The legal document required to be filed with the Securities and Exchange Commission (SEC) prior to securities being offered for sale to the public.
Reimbursement  Restoration; to pay back or repay that expended; the act of making one whole.
Rejection  The refusal of an offer. A rejection terminates an offer.
Release  The relinquishment of a right or claim against another party.
Remand  The return of a case by an appellate court for further action by the lower court.
Remedial statute  Legislation designed to provide a benefit or relief to a victim of a violation of law.
Remedy  The action or procedure that is followed in order to enforce a right or to obtain damages for injury to a right; the means by which a right is enforced or the violation of a right is prevented, redressed, or compensated.
Reorganization  The legal process of forming a new corporation after bankruptcy or foreclosure.
Replevin  An action for the recovery of goods wrongfully taken or kept.
Representational standing  The requirements that must be satisfied for an organization to have the right to file a lawsuit on behalf of its members.
Request for an admission  A method of discovery used to narrow the issues to be litigated by having a party request that the other party admit the facts that are not in dispute.
Request for production of documents  A method of discovery whereby one party asks the other to provide documents for the requesting party's review.
Requirements contract  A contract under which the buyer agrees to buy a certain item only from the seller.
Res   A thing, object, or status.
Resale price maintenance  Manufacturer control of a brand- or trade-name product's minimum resale price.
Rescind  To cancel or annul a contract and return the parties to their original positions.
Rescission  A contractual remedy that cancels the agreement and returns the consideration exchanged to each party.
Res ipsa loquitur   The thing speaks for itself. A rule of evidence whereby negligence of the alleged wrongdoer may be inferred from the mere fact that the injury occurred.
Res judicata   The doctrine that deems a former adjudication conclusive and prevents a retrial of matters decided in the earlier lawsuit.
Respondeat superior  The doctrine imposing liability on one for torts committed by another person who is in his or her employ and subject to his or her control.
Respondent  The party answering a petition for a writ of certiorari in the Supreme Court.
Restitution  A contractual remedy involving one party returning to another the value previously received.
Restraint of trade  Monopolies, combinations, and contracts that impede free competition.
Restrictive covenants  Private agreements that restrict land use.
Retaliation  Striking back against someone for what they did to you. Used in labor law, employment discrimination cases, and whistle-blowing as part of a doctrine prohibiting an employer from firing or taking other adverse actions against employees for reporting the employer to federal agencies for violating various laws.
Retaliatory trade practices  Actions by aggrieved nations responding to tariffs and other unfair trade restrictions imposed by foreign governments.
Reverse  Overturn or vacate the judgment of a court.
Reverse discrimination  The advancement and recruitment of minority workers ahead of similarly qualified nonminority workers.
Revocation  The contractual communication of withdrawing an offer.
RICO  The Racketeer Influenced and Corrupt Organizations Act.
Right of redemption  The right to buy back. A debtor may buy back or redeem his or her mortgaged property when he or she pays the debt.
Right-to-work law  A state statute that outlaws a union shop contract—one by which an employer agrees to require membership in the union sometime after an employee has been hired as a condition of continued employment.
Robbery  Illegally taking something by force.
Robinson-Patman Act  The amendment to Section 2 of the Clayton Act covering price discrimination. As originally adopted, the Robinson-Patman Act outlawed price discrimination in interstate commerce that might substantially lessen competition or tends to create a monopoly.
Rule against perpetuities  The rule that prohibits an owner from controlling what he or she owns beyond a life in being at the owner's death, plus 21 years.
Rule of law  The general and equal application of laws, even to lawmakers.
Rule of first possession  The rule that says one becomes an owner by reducing to possession previously unowned objects or abandoned objects.
Rule of reason  Under the Sherman Act, contracts or conspiracies are illegal only if they constitute an unreasonable restraint of trade or attempt to monopolize. An activity is unreasonable if it adversely affects competition. An act is reasonable if it promotes competition. The rule of reason requires that an anticompetitive effect be shown. See also Per se illegality.
Rules of evidence  The laws governing the admission of evidence, such as testimony and documents, during the trial of a case.
Sale of business doctrine  The legal principle in securities law that might be used to remove the sale of corporate stock from the securities laws' protection if the purchaser of such stock is to operate the business instead of relying on others to do so.
Sanctions  Penalties imposed for violation of a law.
Sarbanes-Oxley Act of 2002  The law enacted to correct inadequacies in the law that existed and allowed numerous examples of corporate fraud. In essence, through increased criminal sanctions and specific requirements, this law attempts to make corporate CEOs more responsible.
Say-on-pay  A policy of companies that allow the compensation of executives to be reviewed by shareholders.
Scheme to defraud  A plan to misrepresent a material fact in order to obtain something, usually money, from another.
Scienter  With knowledge; particularly, guilty knowledge.
Scoping  A regulatory step required of a federal agency by the Council on Environmental Quality. Before preparing an environmental impact statement, an agency must designate which environmental issues of a proposed action are most significant.
S corporation  A business organization that is formed as a corporation but, by a shareholders' election, is treated as a partnership for taxation purposes.
Search warrant  A court order required by the Fourth Amendment of the U.S. Constitution to be obtained from government officials prior to private property being searched or seized.
Secondary air quality standards  Clean Air Act standards designed to protect environmental quality other than human health.
Secondary boycott  Conspiracy or combination to cause the customers or suppliers of an employer to cease doing business with that employer.
Section 1981  That provision of the Civil Rights Act of 1866 that forbids racial discrimination in the making of contracts.
Section 402A  That section of the Second Restatement of Torts that imposes strict liability on product sellers who sell a product in a "defective condition unreasonably dangerous to the user or consumer or his property."
Section 5  Section of the Federal Trade Commission act which authorizes the commission to regulate unfair or deceptive acts or practices in trade.
Secured transactions  Any credit transaction creating a security interest; an interest in personal property that secures the payment of an obligation.
Securities Act of 1933  The federal law that regulates (through disclosure requirements) the initial sale of securities to the public.
Securities and Exchange Commission (SEC)  The federal administrative agency that regulates the securities industry.
Securities Exchange Act of 1934  The federal law that regulates sales (other than the initial sale) of securities. This law governs the resale of securities whether by individuals or through brokers and exchanges.
Security  Under the securities law, an investment in which the investor does not participate in management.
Security interests  An application of property that gives someone an interest in what belongs to another, usually to secure an extension of credit.
Self-regulation  An entire industry's regulation of itself, as opposed to government regulation of the businesses in the industry.
Seller  In commercial law, a person who sells or contracts to sell goods.
Seniority system  A plan giving priority to employees based on the length of time an employee has worked for an employer. An employer may apply different standards pursuant to a good-faith seniority system if the differences are not the result of an intention to discriminate.
Sentencing guidelines  Adopted by the U.S. Sentencing Commission as a means of standardizing the sentences given to similar criminals committing similar crimes.
Separation of powers  The doctrine that holds that the legislative, executive, and judicial branches of government function independently of one another and that each branch serves as a check on the others.
Servant  The person hired to act on behalf of a principal in an agency relationship.
Service mark  Any mark, word, picture, or design that attaches to a service and indicates its source.
Set-off  A counterclaim by a defendant against a plaintiff that grows from an independent cause of action and diminishes the plaintiff's potential recovery.
Sexual harassment  Under Title VII, for an employer or workplace supervisor to promise benefits or threaten loss if an employee does not give sexual favors.
Shareholders  The owners of corporations. Typically these owners vote on major decisions impacting their corporations, most commonly the election of a board of directors.
Shark repellent  Corporate action to make a threatened acquisition unattractive to the acquiring company.
Shelf registration  The process in securities law under Securities and Exchange Commission (SEC) Rule 415 that allows an issuer to satisfy the registration statement requirements, thereby allowing the issuer immediately to offer securities for sale.
Sherman Act  An 1890 congressional enactment designed to regulate anticompetitive behavior in interstate commerce.
Short-swing profits  The proceeds gained by an insider buying and selling, or vice versa, securities within a six-month time period. Such profits are considered to be illegal.
Simplified employee pension  A type of pension permitted by the Revenue Act of 1978. Under this pension type, employers contribute up to a specified amount to employee individual retirement accounts.
Slander  An oral defamatory statement communicated to a third person.
Small-claims court  A court of limited jurisdiction, usually able to adjudicate claims up to a certain amount, such as $3,000, depending on the state.
Social contract theory  A theory by John Rawls that proposes a way for constructing a just society.
Sole proprietorship  The simplest form of business organization, created and controlled by one owner.
Sovereign immunity  A doctrine of state and international law that permits a foreign government to claim immunity from suit in the courts of other nations.
Sovereignty  The supreme, absolute, and uncontrollable power by which any state is governed.
Specific performance  Equitable remedy that requires defendants in certain circumstances to do what they have contracted to do.
Stakeholder theory  Ethical theory which asserts that in order to be ethical a business must take into consideration not only the making of a profit but the impacts of the business on all interests that are affected by the business.
Standing  The doctrine that requires the plaintiff in a lawsuit to have a sufficient legal interest in the subject matter of the case.
Standing to sue  The requirement that a plaintiff must satisfy by demonstrating a personal interest in the outcome of litigation or an administrative hearing.
Stare decisis   The doctrine that traditionally indicates that a court should follow prior decisions in all cases based on substantially similar facts.
State action exemption  The Sherman Act exemption of the sovereign action of a state that replaces competition with regulation if the state actively supervises the anticompetitive conduct.
State-of-the-art defense  A defense that the defendant's product or practice was compatible with the current state of technology available at the time of the event in question.
States' relations article  Article IV of the U.S. Constitution. Among its purposes, this article prevents a state from favoring its citizens over the citizens of another state, thereby making the United States one nation as opposed to 50 subgroups.
Status quo  The conditions or state of affairs at a given time.
Statute  A legislative enactment.
Statute of frauds  Legislation that states that certain contracts will not be enforced unless there is a signed writing evidencing the agreement.
Statute of limitations  A statute that sets a date after which a lawsuit may not be brought. The statute begins running after the happening of a certain event, such as the occurrence of an injury or the breach of a contract.
Statute of repose  A statute that applies to product liability cases. It prohibits initiation of litigation involving products more than a certain number of years (e.g., 25) following their manufacture.
Statutory construction  The rules courts use in interpreting the meaning of legislation.
Strict liability  The doctrine under which a party may be required to respond in tort damages without regard to such party's use of due care.
Strict products liability  The cause of action under which commercial sellers of defective products are held liable without negligence.
Strict scrutiny  A legal test used by courts to test the validity of governmental action, such as legislation, under the equal protection clause of the U.S. Constitution. To satisfy this test, the government needs to demonstrate that there is a compelling state interest justifying the government's action.
Structured settlement  A periodic payment of damages, usually taking the form of a guaranteed annuity.
Subject matter jurisdiction  The authority of a court to hear cases involving specific issues of law.
Submission  The act or process of referring an issue to arbitration.
Subpoena  A court order directing a witness to appear or to produce documents in his or her possession.
Substantial performance  Degree of performance recognizing that a contracting party has honestly attempted to perform but has fallen short. One who has substantially performed is entitled to the price promised by the other less that party's damages.
Substantive due process  The use of the due process provision of the U.S. Constitution to make certain that the application of a law does not unfairly deprive persons of property rights.
Substantive law  A body of rules defining the nature and extent of legal rights.
Summary judgment  A judicial determination that no genuine factual dispute exists and that one party to the lawsuit is entitled to judgment as a matter of law.
Summons  An official notice to a person that a lawsuit has been commenced against him or her and that he or she must appear in court to answer the charges.
Superfund  The Comprehensive Environmental Response, Compensation, and Liability Act of 1980.
Supremacy clause  Article VI of the U.S. Constitution, which states that the Constitution, laws, and treaties of the United States shall be the "supreme law of the land" and shall take precedence over conflicting state laws.
Supreme Court  The highest appellate court.
Surety  One who incurs a liability for the benefit of another. One who undertakes to pay money in the event that his or her principal is unable to pay.
Symbolic speech  Nonverbal expression.
Taft-Hartley Act  The federal law enacted in 1947 to increase the bargaining power of management by creating unfair labor practices by unions, by outlawing the closed shop, by creating an 80-day cooling-off period, by permitting states to adopt right-to-work laws, and by creating the Federal Mediation and Conciliation Service.
Tangible property  Physical property.
Teleology  An ethical system that concerns itself with the moral consequences of actions. Also called consequentialism.
Tenancy in common  A property ownership that is undivided (common) but not necessarily equal between two or more owners.
Tender offer  An invited public offer by a company or organization to buy shares from existing shareholders of another public corporation under specified terms.
Tender performance  The offer by one contracting party to perform a promise; usually associated with the offer to pay for or to ship items under the contract.
Testator  One who has made a will.
Third party  One who enters into a relationship with a principal by way of interacting with the principal's agent.
Third-party beneficiaries  Persons who are recognized as having enforceable rights created for them by a contract to which they are not parties and for which they have given no consideration.
Third-party defendant  A party who is not a party (plaintiff or defendant) to the original litigation. Typically, a defendant might file a claim against a third party stating that if the defendant is liable to the plaintiff, then this third party will be liable to the defendant.
Tippee  A person who learns of nonpublic information about a security from an insider.
Title  A synonym for ownership. Sometimes represented as a document.
Tombstone ad  An advertisement announcing the public offering of securities; these usually run during the waiting period.
Tort  A civil wrong other than a breach of contract.
Trade disparagement  The publication of untrue statements that disparage the plaintiff's ownership of property or its quality.
Trade dress  A legal doctrine giving someone ownership of a distinctive overall appearance or look and feel of a product or service.
Trademark  A statutorily created property in a mark, word, picture, or design that attaches to goods and indicates their source.
Trademark dilution  Using someone's trademark in such a way so as to reduce the value of the trademark's significance, reputation, and goodwill, even if the public is not confused by the use.
Trade practice regulation  A term generally referring to laws that regulate competitive practices.
Trade secret  Any formula, pattern, machine, or process of manufacturing used in one's business that may give the user an opportunity to obtain an advantage over its competitors. Trade secrets are legally protectable.
Trade usage  Refers to the particular use of a word in business that may differ from its common use.
Trading partnership  A business organization made up of two or more partners engaged in providing services.
Treason  Breach of allegiance to one's government, specifically by levying war against such government or by giving aid and comfort to the enemy.
Treaty of Rome  A historic agreement reached by six European countries in 1957 to achieve economic unity in the European Community. The latter is now known as the European Union, and its membership has grown to 15 nations.
Treble damages  See Triple damages.
Trespass  An act done in an unlawful manner so as to cause injury to another; an unauthorized entry upon another's land.
Trial court  The level of any court system that initially resolves the dispute of litigants. Frequently, but not always, a jury serves as a fact-finding body while the judge issues rulings on the applicable law.
Triple damages (or treble damages)  An award of damages allowable under some statutes equal to three times the amount found by the jury to be a single recovery.
Trust  A fiduciary relationship whereby one party (trustee) holds legal title for the benefit of another (beneficiary).
Trustee  One who holds legal title to property for the benefit of another.
Truth in lending  A federal law that requires the disclosure of total finance charges and the annual percentage rate for credit in order that borrowers may be able to shop for credit.
Tying contract  A contract that ties the sale of one piece of property (real or personal) to the sale or lease of another item of property.
Ultra vires   Beyond the scope of corporate powers granted in the charter.
Unconscionable  In the law of contracts, provisions that are oppressive, overreaching, or shocking to the conscience.
Underwriter  The party that, in securities law, guarantees the issuer that the securities offered for sale will be sold.
Undue burden  Under the Civil Rights Act of 1964 and the Americans with Disabilities Act an employer need not take action that is excessively costly or creates excessive inefficiency in order to accommodate an employee's religious beliefs or disability. This is the concept of undue burden.
Undue influence  Influence of another destroying the requisite free will of a testator or donor, which creates a ground for nullifying a will or invalidating a gift. A contract will not be binding if one party unduly influences the other since the parties have not dealt on equal terms.
Unenforceable contract  A contract that cannot be enforced in court.
Unfair competition  A group of statutory torts that include misappropriation of trademarks, patent violations, and copyright breaches. One aspect of the Federal Trade Commission's authority. Section 5 of the FTC Act makes unfair methods of competition illegal.
Unfair labor practices  Activities by management or labor unions that have been declared to be inappropriate by the Wagner Act and Taft-Hartley Act, respectively.
Uniform Commercial Code (UCC)  The most successful attempt to have states adopt a uniform law. This code's purpose is to simplify, clarify, and modernize the laws governing commercial transactions.
Uniformed Services Employment and Reemployment Rights Act (USERRA)  The act which protects the rights of individuals who voluntarily or involuntarily leave employment positions to undertake military service.
Unilateral contract  A contract in which the promisor does not receive a promise as consideration; an agreement whereby one makes a promise to do, or refrain from doing, something in return for a performance, not a promise.
Unilateral mistake  Arises when only one of the parties to a contract is wrong about a material fact. It is not usually a basis for rescinding a contract.
Union security clause  The contractual provision that creates a union shop agreement. This clause requires any person hired as an employee to join the union representing the employees.
Union shop  This term applies, in labor law, to an agreement by management and labor that all employees of a business will be or become union members. Union shops are not allowed in states with right-to-work laws.
United Nations  The principal political organization of the world.
Unreasonable search and seizure  A violation of the Fourth Amendment of the U.S. Constitution that occurs when a valid search warrant is not obtained or when the scope of a valid warrant is exceeded.
Usury  A loan of money at interest above the legal rate.
Utilitarianism  A form of consequentialist ethics.
Utility patent  A property right awarded for a new and non-obvious process, machine, or composition of matter that has a useful function.
Valid contract  A contract that contains all of the proper elements of a contract.
Venue  The geographical area over which a court presides. Venue designates the court in which the case should be tried. Change of venue means moving to another court.
Verdict  Findings of fact by the jury.
Vertical merger  A merger of corporations where one corporation is the supplier of the other.
Vertical price fixing  An agreement between a seller and a buyer (for example, between a manufacturer and a retailer) to fix the resale price at which the buyer will sell goods.
Vertical territorial agreement  Arrangement between a supplier and its customers with respect to the geographical area in which each customer will be allowed to sell that supplier's products. This type of agreement is analyzed under the rule of reason to determine whether it violates the Sherman Act. Limitations on intrabrand competition may be permitted if there is a corresponding increase in interbrand competition.
Vested rights  Rights that have become so fixed that they are not subject to being taken away without the consent of the owner.
Voidable contract  Capable of being declared a nullity, though otherwise valid.
Void contract  A contract that is empty, having no legal force; ineffectual, unenforceable.
Voir dire   The preliminary examination of prospective jurors for the purpose of ascertaining bias or interest in the lawsuit.
Voluntary arbitration  A method of resolving a dispute, as an alternative to litigation, that the parties agree to utilize. This agreement may be made before or after a dispute arises.
Voluntary bargaining issue  Either party may refuse to bargain in good faith regarding matters other than wages, hours, and other terms and conditions of employment. This refusal does not constitute an unfair labor practice. An issue over which parties may bargain if they choose to do so.
Voluntary petition  The document filed by a debtor to initiate bankruptcy proceedings.
Wagner Act  The federal law passed in 1935 that recognizes employees' rights to organize. This law also created the National Labor Relations Board and defined unfair labor practices by management. It is formally known as the National Labor Relations Act.
Waiting period  As it relates to an initial public offering of securities, this is the period of time that follows the filing of documents with the SEC and that precedes when the securities can be sold. Unless the SEC objects and extends this period of time, the waiting period lasts only 20 days.
Waiver  An express or implied relinquishment of a right.
WARN Act  The Worker Adjustment and Retraining Notification Act of 1989; this law requires employers to give notice of plant closings and mass layoffs.
Warrant  A judicial authorization for the performance of some act.
Warranty of authority  An agent's implied guarantee that he or she has the authority to enter into a contract. The agent is liable for breaching the warranty if he or she lacks proper authority.
Warranty of merchantability  A promise implied in a sale of goods by merchants that the goods are reasonably fit for the general purpose for which they are sold.
Wheeler-Lea amendment  Legislation passed in 1938 that expanded the Federal Trade Commission's authority to protect society against unfair or deceptive practices.
White-collar crime  Violations of the law by business organizations or by individuals in a business-related capacity.
White knight  A slang term that describes the inducement of a voluntary acquisition when an involuntary acquisition is threatened. The voluntary acquisition group is a white knight since it saves the corporation from an unfriendly takeover.
Willful and wanton negligence  Extremely unreasonable behavior that causes injury.
Willfully  With intent to defraud or deceive.
Wire fraud  The use of radio, television, telephone, Internet, or other wired forms of communication to conduct fraudulent activities with the intent to deprive an owner of property.
Workers' compensation  A plan for the compensation for occupational diseases, accidental injuries, and deaths of employees that arise out of employment. Compensation includes medical expenses and burial costs and lost earnings based on the size of the family and the wage rate of the employee.
Work rules  A company's regulations governing the workplace, the application of which often becomes an issue in the ability of employees to organize for their mutual benefit and protection.
World Bank  The world's principal financial institution.
World Intellectual Property Organization  A specialized agency of the United Nations that administers certain intellectual property treaties and provides related educational resources.
World Trade Organization (WTO)  Mechanism for enforcing the General Agreement on Tariffs and Trade that allows GATT member countries to bring complaints and seek redress.
Wright-Line doctrine  Establishes procedures for determining the burden of proof in cases involving mixed motivation for discharge.
Writ of certiorari   A discretionary proceeding by which an appellate court may review the ruling of an inferior tribunal.
Writ of habeas corpus   A court order to one holding custody of another to produce that individual before the court for the purpose of determining whether such custody is proper.
Yellow-dog contract  An agreement in which a worker agrees not to join a union and that discharge will result from a breach of the contract.
Zoning ordinance  Laws that limit land use based usually on residential, commercial, or industrial designations.





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