Glossary of Terms

Glossary of Business and Construction Law Terms

A

Arbitration: A method of alternative dispute resolution (ADR) where parties submit their disputes to a neutral third party (arbitrator) for a binding decision, often used in construction contract disputes.

ADR: ADR stands for Alternative Dispute Resolution. It refers to any method of resolving disputes outside of the traditional court system. ADR processes are typically faster, less expensive, and more flexible than litigation, and they often result in more creative and lasting solutions.

Antecedent Transaction: An antecedent transaction is a legal term used in business law, specifically in the context of corporate insolvency. It refers to any transaction entered into by a company prior to its insolvency that may be challenged or overturned by the liquidator or administrator after the company enters an insolvency process, such as liquidation or administration.

Antitrust laws: Prohibit unfair business practices that harm competition, such as price fixing, market allocation, and mergers that substantially lessen competition.

Abandoned property: Property that the owner has voluntarily given up or intentionally relinquished.

Abated bequest : A legacy or gift in a will that is reduced in amount due to circumstances.

Abstract of title : A summary report of the history of ownership of a particular piece of real estate.

Acceptance : The agreement to the terms of an offer, creating a binding contract.

Acceptor: The party accepts a negotiable instrument like a bill of exchange or a check.

Accommodation of interests : Arrangement to reconcile conflicting interests or needs between parties.

Accommodation parties : Parties who enter into an agreement to accommodate the needs or interests of others.

Accord: Agreement between parties to accept something different from what was originally promised.

Accretion: Gradual increase in the size or value of property due to natural forces.

Act of God: Unforeseeable natural event or disaster that excuses a party from fulfilling a contract.

Acts: Legally binding actions or deeds.

Actual breach: A failure to perform a contractual obligation as promised.

Adeemed bequest: A legacy or gift in a will that is revoked or satisfied before the testator’s death.

Adjudication: Formal judgment or decision by a court or administrative agency.

Adjuster: A person who assesses damages and determines insurance claims.

Administrative agencies: Government bodies responsible for implementing and enforcing specific laws or regulations.

Administrative regulations: Rules and regulations issued by administrative agencies.

Administrator/administratrix : Person appointed by the court to manage the estate of someone who died without a will.

Adverse possession: Acquiring ownership of land by openly occupying and using it for a certain period of time.

Affirmative action: Policies and practices aimed at increasing opportunities for groups historically discriminated against.

Agency by estoppel: A situation where a person is deemed to be an agent based on the actions or representations of another.

Agency coupled with an interest: An agency relationship where the agent has a personal interest in the subject matter of the agency.

Agent: A person authorized to act on behalf of another (the principal) in business or legal matters.

Allonge: A piece of paper attached to a negotiable instrument to provide space for additional endorsements.

Alteration: Unauthorized change or modification to a legal document.

Annual percentage rate: The yearly interest rate charged on loans or credit cards, including fees and other costs.

Answer: The defendant’s formal response to a plaintiff’s complaint in a lawsuit.

Anticipatory breach: A party’s indication that they will not fulfill their contractual obligations before the actual performance is due.

Antilapse laws: Laws that prevent a gift from lapsing in certain situations, usually when the intended beneficiary predeceases the testator.

Apparent authority: Authority that a third party reasonably believes an agent possesses based on the principal’s actions or representations.

Appellate court: A court that reviews decisions made by lower courts to determine if legal errors were made.

Arbitration: A method of resolving disputes outside of court, where a neutral third party renders a decision.

Arraignment: Formal reading of criminal charges to the defendant, who then enters a plea.

Arrest: The act of detaining someone by legal authority, usually in response to a criminal allegation.

Arson: The criminal act of intentionally setting fire to property.

Articles of incorporation: Legal documents filed with the state to establish a corporation and outline its structure and purpose.

Artisan’s lien: A legal claim that allows a craftsman or artisan to retain possession of a customer’s property until payment is made for services rendered.

Assault: The intentional threat or attempt to cause harm to another person, coupled with the apparent ability to do so.

Asset: Anything of value owned by an individual or organization.

Assigned risk pool: A group of individuals or businesses considered high risk by insurers and assigned coverage through a government-mandated program.

Assignee: A person to whom a right or interest is transferred by assignment.

Assignment: The transfer of rights or interests from one party to another.

Assignor: A person who transfers rights or interests to another party through assignment.

Assumption of risk: Legal doctrine whereby a person voluntarily accepts the potential dangers inherent in a particular activity or situation.

Attachment: Legal process by which a creditor obtains a security interest in a debtor’s property.

Attestation: The act of witnessing the signing of a legal document and confirming its authenticity.

Authority: Legal power or right to act on behalf of someone else.

Award: A decision or judgment, usually monetary, rendered by a court, arbitrator, or administrative agency.

B

Bid Bond: A type of surety bond submitted with a construction bid to guarantee that the bidder will enter into a contract if awarded the project.

Breach of Contract: Occurs when one party fails to fulfill the obligations outlined in a contract without legal justification.

Bad check: A check that cannot be cashed or processed due to insufficient funds or other issues.

Bail: A sum of money paid to release a person from custody until their trial.

Bailee: The person who receives goods or property from another under a bailment agreement.

Bailee’s lien: The right of a bailee to retain possession of goods until they are paid for their services related to those goods.

Bailment: The temporary transfer of possession of goods from one person (the bailor) to another (the bailee) for a specific purpose.

Bailment by necessity: A bailment created by emergency situations or circumstances beyond the control of the parties involved.

Bailment implied by law: A bailment inferred by the law based on the circumstances of the transaction.

Bailment implied in fact: A bailment inferred from the conduct of the parties involved rather than being expressly stated.

Bailment of lost property: The temporary transfer of possession of property that has been lost by its owner to another person for safekeeping.

Bailor: The person who delivers goods or property to another under a bailment agreement.

Bait-and-switch advertising: A deceptive marketing tactic where a product is advertised at a low price to attract customers, but then a different, usually more expensive, product is offered instead.

Bankrupt: A person or entity who has been declared legally insolvent and unable to pay their debts.

Bankruptcy: A legal process in which a person or business declares inability to pay debts and seeks relief from creditors.

Bargain and sale deed: A type of deed used to convey real property, typically without warranties, but implying that the grantor has the right to convey the property.

Battery: Unlawful physical contact or force used against another person without their consent.

Beneficiary: A person or entity designated to receive benefits or assets from a will, trust, insurance policy, or other legal arrangement.

Bilateral contract: An agreement where both parties commit to fulfilling specific obligations or actions for each other.

Bill of lading: A document issued by a carrier to acknowledge receipt of goods for shipment and to specify the terms of transportation.

Bill of Rights: The first ten amendments to the United States Constitution, which guarantee individual rights and freedoms.

Bill of sale: A legal document that transfers ownership of personal property from one party to another.

Binder: A short-term insurance agreement that offers coverage until a permanent policy is finalized.

Blackmail: The practice of coercing someone into providing money or other advantages by threatening to expose compromising or damaging information about them.

Blank endorsement: An endorsement on a negotiable instrument that does not specify a particular payee, making it payable to anyone who possesses it.

Board of directors: A group of individuals elected by shareholders to oversee the management of a corporation.

Boarding-house keeper: A person who provides lodging and meals for paying guests in their home.

Bodily injury liability insurance: Insurance coverage that pays for the medical expenses and legal fees of individuals injured by the policyholder’s negligence.

Bribery: The act of offering, giving, receiving, or soliciting something of value to influence the actions of an official or other person in a position of trust.

Broker: A person or firm that acts as an intermediary between buyers and sellers, typically in financial or real estate transactions.

Bulk transfer: The sale or transfer of a significant portion of a business’s assets in a single transaction.

Burglary: The unlawful entry into a building or structure with the intent to commit a felony or theft.

Business ethics: Principles and standards that guide behavior in the world of business, encompassing honesty, integrity, fairness, and respect for others.

Business guest: A person who is invited onto business premises for commercial purposes, such as a customer or client.

Bylaws: Rules and regulations adopted by an organization or corporation to govern its internal affairs and operations.

C

Change Order: A written agreement that modifies the terms, scope, or price of a construction contract due to changes in project requirements.

Contractor: An individual or company that agrees to perform specific construction work under the terms of a contract.

Corporate Governance: The system of rules, practices, and processes by which a company is directed and controlled, often involving the relationship between shareholders, directors, and management.

Caveat emptor: Latin for “let the buyer beware,” this principle places the responsibility on the buyer to examine goods before purchase and assumes no warranty of quality or fitness for purpose.

Chattel Mortgage: A chattel mortgage is a type of secured loan where the borrower pledges personal property (chattel) as collateral for the loan. The lender has the right to seize and sell the chattel if the borrower defaults on the loan.

Class-action lawsuit: Allows a representative plaintiff to sue on behalf of a large group of people who have similar claims against the same defendant.

Competition Law: Competition law, also known as antitrust law, is a branch of law that regulates business practices to promote fair competition in the marketplace.

Confidentiality clause: A provision in a contract that prohibits the disclosure of confidential information to third parties.

Contract law: Governs the formation, interpretation, and enforcement of contracts, which are legally binding agreements between two or more parties.

Conciliatory Law: Conciliatory law is a legal framework that promotes the use of alternative dispute resolution (ADR) methods to settle disputes outside of court.

Copyright: Protects an original creative work, such as literary, dramatic, musical, artistic, or audiovisual works, from unauthorized copying or distribution.

Callable bond: A callable bond is a type of bond that the issuer has the option to redeem before its maturity date.

Callable preferred: Preferred stock that can be redeemed by the issuer at a specified price after a certain date.

Capitalization: The total amount of debt and equity used to finance a company’s operations.

Carrier: A person or company that transports goods or passengers for a fee.

Case law: Law established by previous judicial decisions rather than by statutes or regulations.

Cash value: The amount of money that an insurance policyholder is entitled to receive upon surrendering the policy before its maturity or death benefits.

Cashier’s check: A check drawn by a bank on its own funds, signed by the bank’s cashier, and made payable to a specified payee.

Casual gambler: An individual who participates in gambling activities for entertainment rather than as a profession.

Caveat emptor: A Latin phrase meaning “let the buyer beware,” emphasizing that buyers are responsible for assessing the quality and suitability of goods before purchase.

Caveat venditor: A Latin phrase meaning “let the seller beware,” emphasizing that sellers are responsible for the quality and legality of the goods they sell.

Certificate of deposit: A financial product offered by banks and credit unions that allows customers to earn interest on deposited funds for a specified period.

Certified check: A check for which the issuing bank guarantees the availability of funds by setting aside the amount specified on the check.

Charge account: An account established by a retailer or credit provider that allows customers to make purchases on credit and pay for them later.

Charitable trust: A trust established for charitable purposes, with the assets held and managed by a trustee for the benefit of the designated beneficiaries.

Check: A written order directing a bank to pay a specified sum of money to the person named on the check.

Civil law: The branch of law dealing with disputes between individuals or organizations, typically involving compensation rather than criminal penalties.

Class-action suit: A lawsuit filed by a group of people with similar claims against a common defendant.

Close corporation: A corporation with a limited number of shareholders and whose shares are not publicly traded.

Closed shop: A workplace where only union members are allowed to be employed.

Closing: The final stage of a real estate transaction when ownership of the property is transferred from the seller to the buyer.

Closing statement: A document outlining the financial details of a real estate transaction, including the purchase price, closing costs, and adjustments.

COD: Abbreviation for “cash on delivery,” a payment method where payment is collected upon delivery of goods or services.

Code of ethics: A set of principles or rules adopted by a profession or organization to guide ethical behavior.

Codicil: A legal document that modifies, adds to, or revokes provisions in an existing will.

Coinsurance: A provision in insurance policies where the insured and the insurer share the costs of covered losses after the deductible has been met.

Collateral: Property or assets pledged as security for a loan, which the lender can seize if the borrower defaults on the loan.

Collective bargaining: The process by which labor unions and employers negotiate wages, working conditions, and other terms of employment.

Collective bargaining agreement: A legally binding contract between an employer and a labor union that sets forth the terms and conditions of employment.

Collision insurance: Insurance coverage that pays for damage to a policyholder’s vehicle resulting from a collision with another vehicle or object.

Commercial claims court: A court that handles disputes between businesses, typically involving contracts, debts, or property damage.

Commercial impracticability: A legal defense that excuses non-performance of a contract if unforeseen circumstances make performance excessively difficult or expensive.

Common carrier: A transportation company that offers its services to the general public, such as airlines, railways, and bus companies.

Common law: The body of law derived from judicial decisions and custom, rather than from statutes or regulations.

Common stock: A type of equity security representing ownership in a corporation, typically with voting rights and dividends that vary based on the company’s performance.

Community property: Property owned jointly by a married couple, typically acquired during the marriage, which is subject to equal division upon divorce or death.

Comparative negligence: A legal doctrine that apportions fault for an injury or damage between the plaintiff and the defendant based on their respective degrees of negligence.

Compensatory damages: Money awarded to compensate a plaintiff for losses or injuries suffered as a result of the defendant’s wrongful conduct.

Competent parties: Individuals who are legally capable of entering into contracts, typically adults of sound mind who are not under duress or undue influence.

Complaint: A formal legal document filed by a plaintiff alleging specific facts and legal claims against a defendant.

Composition of creditors: An agreement between a debtor and multiple creditors to settle outstanding debts for less than the full amount owed.

Comprehensive insurance: Insurance coverage that protects against damage to a policyholder’s vehicle from perils other than collision, such as theft, vandalism, or natural disasters.

Computer crime: Criminal activity involving computers or computer networks, such as hacking, fraud, or unauthorized access.

Condemnation: The legal process by which the government takes private property for public use, typically with compensation paid to the property owner.

Condominium: A type of real estate ownership where individuals own individual units in a multi-unit building or development, along with shared ownership of common areas and facilities.

Conforming goods: Goods that conform to the specifications and terms of a sales contract.

Consideration: Something of value exchanged between parties to a contract, typically money, goods, or services, which serves as the basis for the contract’s enforceability.

Consignee: The person or entity to whom goods are shipped or delivered, typically the buyer or recipient of the goods.

Consignment: The act of sending goods to be sold by another party, with ownership retained by the sender until the goods are sold.

Consignor: The person or entity that sends goods to be sold on consignment, typically the owner of the goods.

Consolidation: The merger or combination of two or more entities into a single entity.

Constitutional law: Constitutional law pertains to how a nation’s constitution is understood and put into practice.

Constructive bailment: A legal relationship where one party holds possession of another party’s property, not as a result of an express agreement, but because of circumstances implying an obligation to return the property.

Constructive eviction: The legal doctrine that allows a tenant to terminate a lease and vacate the premises if the landlord fails to provide habitable conditions or interferes with the tenant’s right to quiet enjoyment of the property.

Consumer: An individual who purchases goods or services for personal use or consumption.

Contingencies: Uncertain future events or circumstances that may affect the performance of a contract or the outcome of a legal dispute.

Contract: A legally binding agreement between two or more parties, enforceable by law.

Contract carrier: A transportation company that provides services to specific clients under contract, rather than offering services to the general public.

Contract of adhesion: A contract drafted by one party with superior bargaining power and presented to the other party on a take-it-or-leave-it basis, with little or no opportunity for negotiation.

Contract rate: The agreed-upon price or fee for goods or services specified in a contract.

Contract to sell: An agreement in which one party agrees to transfer ownership of goods or services to another party in exchange for payment, with the transfer to occur at a later date.

Contributory negligence: A legal defense that reduces or eliminates a plaintiff’s recovery in a negligence lawsuit if the plaintiff’s own negligent conduct contributed to the injury or damage suffered.

Conversion: The wrongful act of taking or using another person’s property without permission or legal authority.

Convertible bond: A bond that can be exchanged for a specified number of shares of the issuer’s common stock at the bondholder’s option.

Convertible preferred: Preferred stock that can be exchanged for a specified number of shares of the issuer’s common stock at the shareholder’s option.

Cooperative: A business organization owned and operated by its members, who share in the profits and benefits according to their contributions or transactions with the cooperative.

Copyright: Legal protection granted to the creators of original works of authorship, including literary, artistic, musical, and other intellectual creations.

Corporation: A legal entity created by law, with limited liability for its owners (shareholders) and separate legal personality from its owners.

Counteroffer: A response to an offer that introduces new terms or conditions, thereby rejecting the original offer and creating a new offer.

Course of dealing: The pattern of conduct between parties to a contract that establishes a common understanding or course of performance regarding the terms of the contract.

Course of performance: The conduct of parties to a contract in carrying out their obligations under the contract, which may be used to interpret or supplement the terms of the contract.

Covenant: A promise or agreement contained in a contract or legal instrument, typically imposing an obligation or restriction on one of the parties.

Covenant of quiet enjoyment: A landlord’s promise to a tenant that the tenant will be able to use and enjoy the leased premises without interference from the landlord or third parties.

Cover: In contract law, the act of purchasing substitute goods or services to fulfill a contractual obligation when the other party fails to deliver as promised.

Credit: The ability of a person or entity to borrow money or obtain goods and services on trust with the expectation of future payment.

Credit card: A payment card issued by a financial institution, allowing the cardholder to make purchases on credit and repay the amount owed at a later date.

Creditor: A person or entity to whom money is owed, typically as a result of a loan, credit extension, or goods or services provided on credit.

Crime: An act or omission that violates a law and is punishable by the state through imprisonment, fines, or other penalties.

Criminal law: The branch of law that defines crimes, establishes their punishments, and regulates the investigation and prosecution of criminal offenses.

Cross-examination: The questioning of a witness by the opposing party’s attorney during a trial or hearing, typically aimed at challenging the witness’s credibility or testimony.

Cumulative preferred: Preferred stock with a provision that requires any missed dividends to be paid in future periods before dividends can be paid to common stockholders.

Cure: In contract law, the right of a breaching party to rectify or remedy a non-performance of contractual obligations within a specified time period to avoid further consequences or termination of the contract.

Cybercrimes: Criminal activities that involve computers, computer networks, or the internet, such as hacking, identity theft, or online fraud.

Cybertorts: Civil wrongs or injuries caused by negligent or wrongful actions in cyberspace, such as defamation, invasion of privacy, or intellectual property infringement.

D

Defect: Any imperfection or problem in construction work that does not meet industry standards or the contract specifications.

Debt factoring: A financial arrangement where a business sells its unpaid invoices to a third-party (factoring company) at a discount in exchange for immediate cash. The factoring company then collects payment from the customers and remits the remaining amount to the business.

Director: A person appointed to manage a company and make decisions on its behalf. Directors have legal duties to the company and its stakeholders.

Dividend: A distribution of profits made by a company to its shareholders. Dividends can be paid in cash or stock.

Damages: Monetary compensation awarded by a court for loss or injury suffered.

Debenture: A type of debt instrument issued by corporations or governments that acknowledges a debt owed with specified terms of repayment.

Debit card: A payment card that deducts money directly from a cardholder’s checking account to pay for purchases.

Debt: An obligation owed by one party (debtor) to another (creditor), usually money borrowed and to be repaid with interest.

Debt collector: A person or company hired to recover overdue debts from individuals or businesses on behalf of creditors.

Debtor: An individual or entity that owes money or owes a duty to another party.

Deductible: The amount of money an individual must pay out-of-pocket before their insurance coverage kicks in.

Deed: A legal document that transfers ownership of property or grants a right or interest in property.

Defamation: The act of damaging a person’s reputation by making false statements to a third party.

Defendant: The party against whom a legal action is brought, typically in a civil lawsuit or criminal prosecution.

Defense: The argument and evidence presented by a defendant to refute the plaintiff’s claims in a legal proceeding.

Delegation: The act of assigning authority or responsibility to another person or group to act on one’s behalf.

Demurrage: The charge imposed for the delay in loading or unloading a vessel beyond the agreed-upon time.

Devise: The transfer of real property through a will.

Direct examination: The questioning of a witness by the party who called the witness to testify, in a trial or hearing.

Disability income insurance: Insurance coverage that provides income replacement for individuals unable to work due to a disabling illness or injury.

Disaffirmance: The act of voiding a contract, typically by a minor or mentally incompetent person, rendering it unenforceable.

Discharge in bankruptcy: The release of a debtor from personal liability for certain debts through the process of bankruptcy.

Disclaimer of warranty: A statement indicating that the seller of a product does not provide any guarantees about its quality or performance.

Discovery: The pre-trial process where parties exchange information and evidence relevant to the case.

Dishonor: The refusal or failure to honor a negotiable instrument, such as a check or promissory note.

Dissolution: The legal termination or ending of a marriage, partnership, or corporation.

Dividend: A portion of a company’s profits distributed to its shareholders.

Donee: The recipient of a gift or donation.

Donor: The person or entity giving a gift or donation.

Dormant partner: A partner in a business who does not actively participate in its management or operation.

Double indemnity clause: A double indemnity clause is a part of an insurance policy that doubles the payout in specific situations, often triggered by accidental death.

Draft: An order to pay a specified amount of money to a designated person or entity, typically a negotiable instrument like a check or bill of exchange.

Dram shop act: Laws that hold establishments liable for serving alcohol to individuals who subsequently cause harm to others as a result of their intoxication.

Drawee: The person or entity directed to pay a sum of money in a draft or bill of exchange.

Drawer: The person or entity that initiates a draft or bill of exchange, directing the drawee to pay a specified sum of money.

E

Eminent Domain: The government’s power to take private property for public use, typically with compensation to the property owner.

Entire agreement clause: A provision in a contract that states that the written agreement constitutes the complete understanding between the parties and supersedes any prior or contemporaneous agreements or representations.

Environmental laws: Regulate the impact of businesses on the environment, aiming to protect air, water, land, and natural resources.

Earnest Money: A deposit made by a buyer to demonstrate their serious intent to purchase real estate.

Easement: The legal right to use someone else’s land for a specific purpose, such as accessing a neighboring property.

Electronic Fund Transfer (EFT): The transfer of money from one bank account to another electronically, typically initiated through online banking or electronic payment systems.

Emancipated Minor: A person under the age of majority who has been granted legal independence from their parents or guardians.

Embezzlement: The fraudulent appropriation of funds or property by a person entrusted with it.

Emergency Authority: Authority granted to individuals or entities to act in urgent situations, often to address immediate risks or threats.

Employment at Will: A legal doctrine that allows employers to terminate employees for any reason, without having to provide a specific cause.

Encumbrances: Any claim or liability that affects the title to property, such as mortgages, liens, or easements.

Endorsee: The person to whom a negotiable instrument, such as a check or promissory note, is endorsed.

Endorsement: The act of signing the back of a negotiable instrument to transfer ownership or to authorize payment to another party.

Endorser: The individual who signs the reverse side of a negotiable document to either transfer ownership or provide a guarantee for payment.

Endowment Insurance: A type of life insurance policy that pays out a lump sum upon the policyholder’s death or at a specified maturity date.

Entrapment: The act of law enforcement officers inducing someone to commit a crime they would not have otherwise committed, typically through coercion or deception.

Equipment Bond: A type of surety bond that guarantees the performance of a contractor hired to supply equipment or machinery.

Equity: The value of an asset after subtracting any liabilities or debts associated with it, or a system of justice that emphasizes fairness and impartiality.

Escheat: The process by which property reverts to the state when an individual dies without heirs or a valid will.

Escrow: The holding of funds or documents by a neutral third party until specific conditions are met, typically in a real estate transaction.

Estate: All of the assets and liabilities left by a deceased person, or a large piece of land with a grand house on it.

Estate Plan: A set of legal documents outlining how a person’s assets should be managed and distributed after their death.

Estate Tax: A tax imposed on the transfer of a person’s assets after their death, based on the total value of the estate.

Ethics: Moral principles that govern behavior and decision-making, often within a professional or societal context.

Eviction: The legal process of removing a tenant from a property by a landlord, typically for non-payment of rent or violation of lease terms.

Evidence: Information presented in court to prove or disprove facts in a legal case.

Exclusion: The act of specifically denying coverage for certain risks or perils in an insurance policy.

Exclusive Dealing Arrangement: An agreement between a seller and a buyer that restricts the buyer from purchasing products or services from anyone other than the seller.

Exculpatory Clause: A contractual provision that releases one party from liability for certain acts or events.

Executed Contract: A contract in which all parties involved have fulfilled their obligations.

Execution: The process of carrying out a court order, such as seizing property to satisfy a judgment.

Executor/Executrix: A person appointed in a will to carry out the administration of an estate.

Executory Contract: A contract where one or more parties have not yet fulfilled their obligations.

Exempt Property: Property that is protected from being seized by creditors or from being included in bankruptcy proceedings.

Express Authority: Authority explicitly granted to an agent by a principal through written or verbal instructions.

Express Contract: A contract where the terms are clearly outlined, whether verbally or in writing.

Express Warranty: A guarantee made by a seller to a buyer regarding the quality, condition, or performance of a product or service.

Extended Coverage Rider: An additional provision added to an insurance policy to broaden the scope of coverage beyond what is typically included.

 

F

Force Majeure Clause: A contract provision that excuses a party from performing their obligations in the event of unforeseeable circumstances, such as natural disasters or acts of God.

Fixed Charge: A security interest in specific, identifiable assets of a company that takes priority over other claims in the event of insolvency.

Floating Charges: A security interest in a company’s general assets that does not take priority over other claims until the charge crystallizes, typically upon insolvency.

Force majeure: Refers to an unforeseen event beyond the control of either party that makes it impossible to perform a contractual obligation. Examples include natural disasters, wars, and strikes.

Freehold: An ownership interest in land that is not subject to any lease or other encumbrance.

Face value: The nominal value of a financial instrument or security as stated on its surface.

Factor: A financial institution that purchases receivables from a business at a discount for immediate cash.

False advertising: Misleading or deceptive statements or claims made in the promotion of a product or service.

False arrest: Unlawful detention or confinement of an individual by law enforcement without proper legal authority.

False imprisonment: Unlawful confinement or restraint of an individual’s freedom of movement against their will.

False pretense: Intentionally deceiving someone to gain something of value, usually money or property.

Family income policy: An insurance policy that provides benefits based on the total income of the insured’s family rather than individual incomes.

Felony: A felony is a major crime usually punishable by more than a year in prison or even by death penalty.

Fiduciary: A person or entity legally entrusted to act in the best interest of another party, often involving financial matters.

Finance charge: The cost of borrowing money, including interest and any additional fees.

Financial responsibility laws: Regulations requiring individuals to demonstrate the ability to cover the costs of potential damages or liabilities resulting from certain activities, such as driving a vehicle.

Financing statement: A document filed to give notice of a security interest in personal property used as collateral for a loan.

Fixture: An item of personal property that has become permanently attached to real property and is treated as part of the real property.

Floater policy: An insurance policy that covers movable property, such as jewelry or electronics, regardless of its location.

FOB destination: Freight terms indicating that the seller is responsible for the cost and risk of transporting goods to a specified destination.

FOB shipping point: Freight terms indicating that the buyer is responsible for the cost and risk of transporting goods from the seller’s location.

Forbearance: A temporary suspension or reduction of loan payments granted by a lender to a borrower experiencing financial hardship.

Foreclosure: Legal process by which a lender repossesses and sells a property due to the borrower’s failure to make mortgage payments.

Forged check: A check that has been fraudulently altered or signed without authorization.

Forgery: The act of falsely creating or altering a document or signature with the intent to deceive.

Formal contract: A legally binding agreement that is typically written and signed by the parties involved.

Franchise: A business arrangement in which an individual or entity (the franchisee) is granted the right to operate a business using the name, branding, and business model of another company (the franchisor).

Fraud: Intentional deception or misrepresentation made for personal gain or to cause harm to another party.

Friendly fire: Friendly fire refers to unintentional gunfire or attacks directed at one’s own military personnel or allies during the course of military operations.

Fringe benefits: Non-monetary perks or benefits provided to employees in addition to their regular salary or wages.

Full performance: The complete fulfillment of all obligations or terms specified in a contract or agreement.

Fungible goods: Goods that are interchangeable and indistinguishable from one another, such as commodities or currencies.

Future goods: Goods that are not yet in existence or are not yet owned by the seller but will be acquired or produced in the future.

G

Gambling: Refers to engaging in games of chance for monetary or other valuable considerations.

Gaming: Refers to both legal and illegal forms of gambling activities.

Garnishment: A legal process where a creditor collects a debt by obtaining a court order to seize a portion of a debtor’s wages or assets.

General agent: An individual authorized to perform a broad range of actions on behalf of another person or entity.

General jurisdiction: The authority of a court to hear cases involving a wide variety of legal matters within a geographic area.

General partner: An owner of a partnership who has unlimited liability for the debts and obligations of the business.

Gift: A voluntary transfer of property or money from one person to another without consideration or expectation of something in return.

Goods: Tangible items that are capable of being bought, sold, or traded.

Grace period: A period of time after a due date during which a payment can be made without penalty or consequences.

Grantee: The recipient of a grant, often referring to real estate or property.

Grantor: The person or entity that gives a grant or conveys property to another person or entity.

Gratuitous agent: An agent who acts without expectation of compensation.

Gratuitous bailmen: A person who temporarily takes custody of another person’s property without compensation, typically for safekeeping.

Guaranteed insurability option: A provision in an insurance policy allowing the policyholder to purchase additional coverage at specified future dates without providing evidence of insurability.

Guarantor: A person or entity that promises to pay a debt or perform a duty if the primary debtor fails to do so.

Guaranty: A promise by one party to pay a debt or fulfill an obligation if the other party fails to do so.

Guardian: A person legally entrusted with the care and management of the person, property, or both of a minor or an incapacitated individual.

Guest laws: Legal provisions that define the responsibilities and liabilities of individuals who invite others onto their property for social or recreational purposes.

H

Heir: Someone who receives property based on their relationship to the deceased. 

Holder: A person in possession of commercial documents. 

Holder in due course: An individual who possesses a document only subject to valid legal defenses. 

Holographic will: A will that is handwritten and signed by the person making it. 

Homeowners Policy: An insurance policy that provides coverage for homeowners against various risks.

I

Intellectual Property: Legal rights that protect creations of the mind, such as patents, trademarks, copyrights, and trade secrets.

Indemnity: A promise by one party to reimburse another party for any losses or damages they may incur.

Insurance laws: Govern the insurance industry, including the regulation of insurers and the issuance of insurance policies.

Identified goods: Goods that are specifically designated and agreed upon by parties in a contract.

Identity theft: The fraudulent acquisition and use of someone else’s personal information for financial gain or other illegal purposes.

Implied authority: Authority that is not expressly granted but is assumed to be necessary to carry out a person’s duties or responsibilities.

Implied contract: A contract that is inferred from the conduct or actions of the parties involved, rather than explicitly stated in writing or verbally.

Implied warranty: A warranty that is not explicitly stated but is automatically provided by law, guaranteeing that a product will meet certain standards of quality and performance.

In pari delicto: Both parties are equally at fault or responsible for wrongdoing.

Incontestable clause: A provision in an insurance policy that prevents certain aspects of the policy from being contested after a certain period of time has passed.

Indemnification: Compensation or reimbursement for losses, damages, or expenses incurred by one party on behalf of another.

Independent contractor: A person or entity hired to perform a task or provide a service, but who operates independently and is not considered an employee of the hiring party.

Indictment: A formal allegation or legal charge of a severe offense, often issued by a grand jury.

Infliction of emotional distress: Intentionally causing severe emotional suffering or trauma to another person through reckless or malicious behavior.

Informal contract: A contract that is not legally binding because it lacks certain formalities, such as a written document or a signature, but is still recognized as valid under certain circumstances.

Inheritance: The assets, property, or rights passed down to heirs or beneficiaries upon the death of the owner.

Initial appearance: The first court appearance by a defendant, where charges are presented, and initial procedural matters are addressed.

Injunction: A court order that requires a party to refrain from certain actions or to perform specific acts to prevent harm or enforce rights.

Insider trading: The illegal practice of trading stocks or other securities based on non-public, material information about the company.

Insolvency: The financial state of being unable to pay debts as they become due.

Insolvent: Unable to pay debts owed.

Installment loan: A loan that is repaid over time in a series of scheduled payments, typically including both principal and interest.

Insurable interest: A financial interest in the subject matter of insurance that justifies obtaining insurance coverage.

Insurance: A contract in which an individual or entity pays premiums to an insurance company in exchange for financial protection or reimbursement against specified risks.

Insurance agent: A licensed representative who sells insurance products on behalf of an insurance company.

Insurance broker: A licensed intermediary who helps individuals or businesses find and purchase insurance policies from insurance companies.

Insured: The person or entity provided coverage under an insurance policy.

Insurer: The insurance company that issues an insurance policy and agrees to provide coverage or compensation for specified risks.

Intentional tort: A wrongful act committed intentionally that causes harm to another person or property.

Interest: The cost of borrowing money or the return on investment, typically expressed as a percentage.

Interference with contractual relations: Intentionally causing one party to a contract to breach the contract, resulting in harm to the other party.

Interrogatories: Written questions posed by one party to another as part of the discovery process in a legal proceeding.

Interstate commerce: The buying, selling, or exchange of goods, services, or money between different states.

Intestate: Dying without a valid will in place to dictate how assets should be distributed.

Intrastate commerce: The buying, selling, or exchange of goods, services, or money that occurs solely within the borders of a single state.

Invasion of privacy: The unauthorized intrusion into an individual’s private affairs or the public disclosure of private information without consent.

Involuntary bankruptcy: Bankruptcy proceedings initiated by creditors against a debtor who is unable to pay debts as they become due.

Issue: A disputed point or question that is subject to legal or factual examination and determination.

J

Joint and several liability: Where two or more parties are jointly and severally liable, each party is individually liable for the entire amount of the damages.

Joint tenancy: Ownership of property by two or more individuals with equal rights to the property, including the right of survivorship.

Joint venture: Business arrangement where two or more parties collaborate for a specific purpose or project, sharing profits, risks, and liabilities.

Judgment: Official decision or ruling made by a court regarding a legal dispute or case.

Judgment lien: Legal claim placed on a debtor’s property as a result of a court judgment, allowing the creditor to seize the property to satisfy the debt.

Judicial review: Process through which courts examine the constitutionality and legality of governmental actions, laws, or decisions.

Jurisdiction: Authority granted to a court to hear and decide legal cases within a specific geographic area or concerning particular subject matters.

 

K

L

Lien: A legal claim against a property to secure payment for services or materials provided during a construction project.

Liquidated Damages: A predetermined amount of money specified in a contract that a party must pay if they fail to meet certain obligations, often used to compensate for project delays.

Leveraged Finance: Financing that relies heavily on debt to fund a business transaction or acquisition.

License (property): A permission granted by the owner of land to another person to occupy or use the land for a specific purpose.

Labor union: A labor union is a group established by workers to bargain collectively with employers for improved wages, benefits, and working conditions.

Land contract: A legal agreement outlining the terms and conditions for the sale of real property.

Landlord: A person or entity who owns property and rents it out to tenants in exchange for payment.

Lapse: The expiration or termination of a legal right or contract due to failure to meet certain conditions.

Larceny: The unlawful taking and carrying away of someone else’s personal property with the intent to permanently deprive the owner of it.

Law: A system of rules and regulations enforced by a governing authority, typically to maintain order and protect rights within a society.

Lease: A contractual agreement granting temporary possession or use of property in exchange for rent or other compensation.

Legacy: Property or money left to someone in a will or passed down through generations.

Legal detriment: An obligation, loss, or disadvantage suffered as a result of a legal agreement or action.

Legal purpose: An objective or activity that is permitted by law and not contrary to public policy.

Legal rate: The maximum interest rate permitted by law to be charged on a loan or financial transaction.

Legal tender: Currency or coins recognized by a government as acceptable for payment of debts and obligations.

Lemon laws: Laws that protect consumers who purchase defective vehicles by requiring manufacturers to repair or replace them.

Lessee: A person or entity who leases or rents property from a landlord.

Lessor: A person or entity who grants a lease or rental agreement to a lessee.

Leveraged buyout (LBO): The acquisition of a company using a significant amount of borrowed funds, typically using the company’s assets as collateral.

Libel: A false and defamatory statement that is written and published, damaging a person’s reputation.

License: A legal permission granted by an authority to engage in a specific activity or use property owned by another.

Licensing statutes: Laws that regulate the granting of licenses for specific professions, activities, or businesses.

Lien: A legal claim or right against a property as security for a debt or obligation.

Lienholder: A person or entity that holds a lien on property as security for a debt or obligation.

Life insurance: A contract between an insurer and a policyholder in which the insurer agrees to pay a designated beneficiary a sum of money upon the insured person’s death.

Life insurance trust: A trust established to hold and manage life insurance policies for the benefit of designated beneficiaries.

Limited jurisdiction: The authority of a court to hear only certain types of cases or cases within a specified geographical area.

Limited liability: A legal concept that limits an individual’s financial liability to the amount invested in a business or venture.

Limited liability company (LLC): A business structure that combines the limited liability of a corporation with the flexibility and tax benefits of a partnership.

Limited liability partnership (LLP): A partnership in which each partner’s liability is limited to the extent of their investment in the business.

Limited partner: A limited partner is a participant in a limited partnership whose financial liability is restricted to the extent of their investment in the partnership.

Limited payment life insurance: A type of life insurance policy in which premiums are paid for a specified period, after which the policy remains in force without further premium payments.

Line of credit: A revolving loan arrangement in which a lender agrees to provide a borrower with a maximum loan amount that can be drawn upon as needed.

Liquid assets: Assets that can be easily converted into cash without significant loss of value, such as stocks, bonds, and savings accounts.

Liquidated claim: A claim for a fixed or readily determinable amount of money that has been established through agreement or by a court.

Liquidated damages: Damages agreed upon by parties in a contract as the amount to be paid in the event of a breach, typically specified in the contract itself.

Listing contract: A contractual agreement between a property owner and a real estate broker, granting the broker authorization to seek a buyer for the property.

Litigation: The legal process of resolving conflicts and disputes through the court system.

Living (inter vivos) trust: A trust created during the grantor’s lifetime to hold and manage assets for the benefit of designated beneficiaries.

Living will: A legal document that specifies a person’s wishes regarding medical treatment in the event they become incapacitated and unable to communicate.

Lobbying: The act of attempting to influence government officials or policies on behalf of an individual or organization.

Long-term care insurance: Insurance coverage that provides benefits for long-term care services, such as nursing home care or home health care.

Loss leader: A product sold at a loss to attract customers to a store or business in the hope that they will also purchase other, more profitable items.

Lost property: Personal property that has been unintentionally left behind or misplaced by its owner.

M

Mediation: A method of ADR where a neutral third party (mediator) assists disputing parties in reaching a voluntary settlement.

Merger and Acquisition (M&A): The process of one company combining with another through various methods, including mergers, acquisitions, or takeovers.

Magnuson-Moss Warranty Act: Legislation aimed at preventing deceptive warranties and mandating that terms and conditions are presented clearly and comprehensibly. 

Mailbox rule: A principle of contract law stating that an acceptance of an offer becomes binding once it is properly addressed and placed in the mailbox. 

Major medical insurance: Insurance coverage designed to address extraordinary expenses related to illnesses or accidents. 

Maker: The individual who drafts and signs a promissory note. 

Malicious prosecution: The wrongful initiation of legal proceedings against an individual who has not committed any wrongdoing. 

Malpractice: Professional misconduct involving improper or unethical behavior in the performance of duties, whether intentional, negligent, or due to ignorance. 

Marine insurance: Insurance that provides coverage for ships, their crew, and cargo. 

Marital deduction: A deduction in estate taxes that allows for tax-free transfers of property to a spouse. 

Market allocation: An agreement among competitors not to compete in specific markets. 

Market price: The current price at which goods are bought and sold in the marketplace. 

Material breach: A significant violation of a contract that undermines its value and excuses further performance by the injured party. 

Mechanic’s lien: A lien granted to individuals who provide labor, materials, or services for the construction of buildings. 

Mediation: The intervention of a neutral third party to facilitate the resolution of disputes between two conflicting parties. 

Medicaid: A state-administered program that provides health care coverage for economically disadvantaged individuals. 

Medical insurance: Insurance coverage that addresses emergency room expenses and doctor’s fees for nonsurgical services. 

Medical payments insurance: Insurance coverage for medical expenses resulting from injuries sustained in a car accident. 

Medicare: A federal program that provides health insurance coverage for individuals aged sixty-five and older or those with certain disabilities. 

Memorandum: An informal written record of an agreement required by the statute of frauds. 

Merchant: An individual regularly engaged in the sale of goods or possessing specialized knowledge of goods. 

Merchantable goods: Goods deemed suitable for their intended use or purpose. 

Merger: The consolidation of two corporations to form a new entity. 

Miranda warnings: Legal rights read to a suspect upon arrest. 

Misdemeanor: A less serious criminal offense punishable by a jail sentence of less than one year. 

Mislaid property: Property temporarily misplaced by its owner. 

Mitigate the damages: To attempt to minimize losses once a breach of contract occurs. 

Modified life insurance: Life insurance with gradually increasing premiums over time. 

Monopoly: The control or domination of a market, often achieved through restrictive practices or agreements. 

Mortgage: A legal claim against property held by a lender as security for repayment of a loan. 

Mortgage assumption: The right of a buyer to take over and assume responsibility for an existing mortgage. 

Mortgage bond: A bond secured by a specific piece of real property. 

Mortgage commitment: An agreement by a lender to grant a mortgage loan. 

Mortgagee: The party who borrows money to purchase real property. 

Mortgagor: The party who lends money for the purchase of real property.

Motion: A formal request made to a judge for a ruling on a legal matter.

Multiperil policy: Insurance policy combining various types of coverage, focusing more on who is insured rather than specific perils covered.

Mutual benefit bailment: A bailment in which both the bailor and the bailee derive benefits.

Mutual mistake: An error regarding certain facts made by both parties to a contract.

 

N

Non-Disclosure Agreement (NDA): A legally binding contract that establishes confidentiality obligations between parties, often used to protect sensitive business information.

Necessaries: Essential items required for sustaining life, such as food, clothing, and shelter.

 Negligence: Failure to exercise reasonable care, resulting in harm to another person or damage to their property.

 Negotiable: Capable of being legally transferred from one party to another.

 Negotiable instrument: A written document that can serve as a form of currency or as a credit instrument.

 Negotiation: The act of transferring commercial paper in a manner that confers ownership upon the transferee.

 Net estate: The total assets left behind by a deceased person, minus certain allowable deductions.

 No-fault insurance: Insurance coverage that provides compensation for bodily injuries regardless of who caused the accident.

 Nominal consideration: A small sum of money or token used to establish the existence of a contract.

 Nominal damages: Monetary compensation awarded for breach of contract when no actual loss or harm has been suffered.

 Nonforfeiture rights: Options for utilizing the cash value of an insurance policy to prevent its lapse.

Nonliquid assets: Assets that cannot readily be converted into cash to meet financial obligations.

 Nonmerchant: A seller who engages in occasional or non-professional transactions.

 Nonprofit corporation: A corporation primarily established for purposes other than profit-making.

 Nontrading partnership: A partnership engaged in professional activities rather than commercial trading.

 No-par stock: Stock that does not specify a face value on the stock certificate.

 Notice of dishonor: Communication provided to a secondary party indicating that the primary party has failed to fulfill payment obligations.

 Novation: The substitution of a new party for one of the original parties in a contract.

 Nuisance: The use of one’s property in a manner that causes annoyance or disturbance to others.

Nuncupative will: An oral will, typically made in the presence of witnesses and under specific legal conditions.

 

O

Official Receiver: A government official who takes control of a company’s assets when it is declared insolvent.

Objective impossibility: When performance of a contract becomes entirely impossible due to extreme circumstances beyond control.

Obligor: A party who is legally obligated to pay money or fulfill an action as stipulated in a contract on behalf of another party.

Offer: A commitment made by one party to perform an action provided that another party either completes a specified task or agrees to refrain from certain actions.

Offer and acceptance: The mutual agreement process through which parties involved in a contract consent to its terms and conditions.

Offeree: The individual or entity to whom an offer is presented.

Offeror: The party who makes an offer to another individual or entity.

Omnibus clause: Insurance coverage extending to the insured’s family members and authorized drivers of the insured’s vehicle.

Open coverage: Insurance policy payout based on the actual cost of repairs or damages incurred.

Open shop: A business where employment is not contingent upon joining a labor union.

Option: An agreement to maintain an offer open and unchangeable for a specified duration.

Ordinance: A law enacted by a local legislative body, such as a city council or village board.

Ordinary holder: A holder of a negotiable instrument who does not qualify as a holder in due course and is vulnerable to both real and personal defenses.

Overdraft: A check drawn on insufficient funds that is covered by the bank.

 

P

Partnership Agreement: A legally binding contract that outlines the terms and conditions governing a partnership, including profit sharing and decision-making processes.

Performance Bond: A type of surety bond that guarantees a contractor will fulfill their contractual obligations and complete a construction project.

Plaintiff: The party who initiates a lawsuit or legal action against another party (the defendant).

Partnership: A legal relationship between two or more people who carry on a business together.

Patent: Grants an inventor exclusive rights to their invention for a limited period, allowing them to prevent others from making, using, selling, or importing the invention without their permission.

Permits and licenses: Authorizations granted by the government to businesses to operate in a specific location or industry.

Professional negligence: Failure by a professional to meet the standard of care expected of someone in their profession.

Par stock: Stock with a designated value stated on the stock certificate.

Parol evidence rule: Rule stipulating that prior oral or written agreements cannot alter the terms of a written contract.

Parole: Conditional release from prison permitting an individual to complete their sentence outside of prison walls.

Participating Preferred: Preferred stock that entitles shareholders to receive both preferred dividends and a share of corporate profits.

Partner: Co-owner of a business venture.

Partnership: Business arrangement where two or more individuals co-own and operate a venture for profit.

Partnership Agreement: Document establishing the terms and conditions of a partnership.

Past Consideration: Promise made in return for an action that has already occurred.

Patent: Exclusive right granted to an inventor to manufacture, sell, or license their invention.

Payable to Bearer: Instruction indicating that the bearer of an instrument is entitled to payment.

Payable to Order: Instruction indicating that payment should be made to a specified payee or their order.

Payee: Recipient of payment on a check, draft, or promissory note.

Per Capita: Equal distribution of an estate among all beneficiaries.

Per Stirpes: Distribution of an estate so that each beneficiary receives the share their deceased ancestor would have received.

Peremptory Challenge: Right of attorneys to dismiss potential jurors without cause.

Perfect Tender Rule: Requirement for sellers to deliver goods that precisely match the terms of the contract.

Periodic Tenancy: Lease that automatically renews for the same duration as the original term until terminated by either party.

Personal (limited) Defenses: Defenses that arise after the execution of an instrument and cannot be used against a holder in due course.

Personal Liability Insurance: Insurance covering claims from individuals injured by the actions of the insured.

Personal Property: Moveable assets.

Petit Jurors: Jurors selected for civil or criminal trials.

Plaintiff: Party initiating a legal action.

Pleadings: Legal documents comprising a complaint and any subsequent responses.

Pledge: Promise to donate to a charitable cause; also, the transfer of personal property as security for a debt.

Pledgee: Recipient of pledged personal property as security for a debt.

Pledgor: Party who transfers possession of personal property as security for a debt.

Police Power: Authority of a state to safeguard the welfare of its citizens.

Policy: Written contract between an insurer and insured party.

Postdated Check: Check bearing a date later than the actual issue date.

Power of Attorney: Formal document granting authority to act on behalf of another.

Precedent: Previous court decision with relevance to the current case.

Preemptive Right: Shareholders’ entitlement to purchase new stock before it’s offered to the public.

Preferred Stock: Stock with priority in receiving dividends.

Preliminary Hearing: Hearing held after arrest to determine if there’s sufficient cause for continued detention.

Preliminary Negotiations: Discussions between parties preceding an offer in contract law.

Premium: Cost of insurance coverage.

Prenuptial Agreement: Contract made between soon-to-be spouses concerning their respective rights and responsibilities.

Prepayment privilege: Right to pay off a mortgage balance before the term ends.

Present Sale: Sale where ownership of goods transfers at the time of contracting.

Presentment: Demand for payment of commercial paper; also, a formal accusation.

Pretrial Conference: Meeting before a trial where parties discuss case details and possibly reach a settlement.

Price Fixing: Agreement among sellers to set prices at a certain level.

Price Misrepresentation: Offering an item at a discounted price higher than its regular price.

Primary Parties: Parties primarily responsible for payment on a negotiable instrument.

Principal: Party who authorizes another to act on their behalf.

Private Carrier: Carrier exclusively transporting goods for its owning business.

Privity of Contract: Relationship between contracting parties.

Probable Cause: Reasonable belief that a crime has occurred or certain facts exist.

Probate: Process of validating a will.

Probation: Supervised release of an offender, allowing them to avoid prison under specific conditions.

Product Liability: Legal responsibility of manufacturers and sellers for defects causing harm.

Professional Corporation: Corporation established to operate a professional practice.

Professional Gambler: Individual who gambles as a profession.

Profit: Right to extract resources from another’s property.

Profit Corporation: Corporation established to generate profits.

Promisee: Person or entity to whom a commitment is pledged.

Promisor: Party making a promise.

Promissory Estoppel: Legal principle enforcing a promise lacking consideration.

Promissory Note: Document in which one party promises to pay a sum of money to another.

Property and Casualty Insurance: Insurance covering property damage and liability.

Property Damage Liability Insurance: Insurance protecting against claims for damage to others’ property.

Pro-rata Liability: Insurer’s liability for loss when multiple policies cover the same property.

Prorated Premium: Premium refundable to the insured if the policy is canceled by the insurer.

Proximate Cause: Direct cause of loss or damage.

Proxy: Authorization by a stockholder for another to vote their shares.

Public Enemy: Military force of a foreign nation.

Public Liability Insurance: Insurance against claims for injuries caused by negligence.

Puffing: Exaggerated sales statements or advertising about merchandise quality.

Punitive Damages: Damages imposed on a wrongdoer as punishment for intentional misconduct.

Purchase Money Mortgage: New mortgage secured for real property purchase.

Purchase Offer: Proposal from a buyer to purchase real property.

Q

 R

Real Estate Transaction: The buying, selling, or transfer of real property, often involving contracts, deeds, and financing.

Receivership: A legal process where a court appoints a receiver to take control of a company’s assets and manage them for the benefit of creditors.

Refinancing: Replacing an existing debt with a new one, often on more favorable terms.

Restrictive covenants (employment/corporate) : Clauses in an employment contract or shareholder agreement that restrict certain activities or behaviors of the employee or shareholder.

Restrictive covenants (land): Clauses in a deed of land that restrict how the land can be used.

Rain Check: A voucher that permits the purchase of an out-of-stock item at a later date for the sale price.

 Ratify: To officially approve or sanction something.

 Real Property: Land, along with any permanent structures or improvements attached to it.

 Reasonable Care: The level of caution and diligence expected from an average person under normal circumstances.

 Receiving Stolen Property: The act of knowingly possessing goods obtained through theft or dishonest means.

 Regular Charge Account: An account where the full balance must be paid upon receipt of each bill.

 Reinstatement Clause: A provision in insurance policies that allows the policyholder to restore coverage after it has lapsed.

 Rejection: The refusal of an offer by the recipient.

 Release: A document serving as proof of the settlement of a claim or legal obligation.

 Remedy: A legal course of action available to an injured party to seek redress for a breach of contract.

 Removal for Cause: The dismissal of a potential juror during jury selection due to their inability to remain impartial.

 Rent: Payment made by a tenant to a landlord in exchange for the use of leased property.

 Replevin: Legal action taken by a buyer to recover goods wrongfully withheld by the seller.

 Repossession: The legal process by which a creditor takes back possession of collateral for an unpaid debt.

 Rescind: To cancel or annul a contract, returning the parties to their pre-contractual positions.

 Rescission: The mutual agreement to cancel and discharge the obligations of a contract.

 Residuary Gift: A bequest in a will that assigns the remainder of the estate to one or more beneficiaries.

 Respondeat Superior: A legal doctrine holding a principal liable for the wrongful acts of an agent under certain circumstances.

 Restrictive Covenant: A condition in a deed that limits the use or development of property.

 Restrictive Endorsement: An endorsement on a negotiable instrument that imposes limitations on its transferability.

 Revocation: The withdrawal or cancellation of an offer before it is accepted.

 Revolving Charge Account: An account where a portion of the balance can be paid off each month.

 RICO: Acronym for the Racketeer Influenced and Corrupt Organizations Act, a U.S. federal law targeting organized crime.

 Right of Survivorship: The legal right ensuring that ownership interest passes to surviving joint tenants upon the death of one tenant.

 Robbery: The act of forcefully taking money or property from another person.

S

Securities Law: The body of laws and regulations that govern the issuance and trading of securities, including stocks and bonds.

Subcontractor: A company or individual hired by a general contractor to perform specific tasks or provide services within a larger construction project.

Substantial Completion: The stage in a construction project when the work is nearly finished, allowing the owner to use the property for its intended purpose while some minor items may still need to be completed.

Shareholder: A person who owns shares in a company.

Share Option Scheme: A plan offered by a company to its employees or directors that gives them the right to buy shares in the company at a discounted price or at a predetermined price in the future.

Small Self-Administered Scheme: A type of pension scheme that allows individuals to manage their own retirement savings.

sale: A contract whereby the seller transfers title in goods to the buyer for a specified price.

sale on approval: A transaction where goods are delivered to the buyer for trial purposes.

sale or return: A sale allowing the buyer to return goods within a set or reasonable period.

satisfaction: Fulfillment of the terms of a new agreement resulting from an accord.

scope of authority: The extent of an agent’s power to conduct the principal’s business.

scope of the agency: The range of duties an agent has in conducting the principal’s business.

secondary parties: Parties liable for payment of a negotiable instrument if the primary party fails to pay.

secret partner: A partner unknown to the public but actively involved in management.

secured credit: Credit granted based on the borrower’s pledge of property and commitment to repay.

secured debt: Debt for which the creditor has a claim against specific property of the debtor.

security agreement: An agreement granting a creditor a security interest in the debtor’s property.

security deposit: Money paid to a landlord to cover damages caused by a tenant.

separation of powers: The principle of dividing governmental powers among independent branches.

settlement: The distribution of an estate after debts, taxes, and expenses are paid; also, resolving differences in a lawsuit without a trial.

settlement options: Different ways life insurance proceeds can be paid to beneficiaries.

shelter principle: Transferees of negotiable instruments receive all the rights of the transferor.

Shoplifting: The action of removing merchandise from a store without completing payment for it.

short rate: The portion of premium refunded when an insured cancels a policy.

silent partner: A partner known to the public but not involved in management.

Slander: Verbal dissemination of false statements intended to damage an individual’s reputation.

small claims court: A court handling minor civil cases involving small sums of money.

sole proprietorship: A business owned and operated by one person.

sole tenancy: Ownership by a single individual.

special agent: An agent authorized to perform specific acts or a limited number of acts for the principal.

special bailment: A bailment imposing an extraordinary standard of care on the bailee.

special endorsement: An endorsement directing payment to a specified person.

specific performance: A court order requiring a party to fulfill a contract according to its original terms.

stale check: An uncertified check more than six months old.

standard fire insurance policy: Basic insurance covering losses from fire and lightning.

standby trust: A trust established upon the occurrence of a specific event.

standing to sue: Legal authority to bring a lawsuit due to legitimate issues.

stare decisis: The legal principle of following precedents in similar cases.

station in life: A person’s economic and social status in the community.

Statute of Frauds: Legal statute mandating that specific contracts must be documented in writing to be enforceable.

statute of limitations: Law setting time limits for initiating lawsuits.

statutes: Laws enacted by Congress, state legislatures, and local governments.

stock: Ownership interest in a corporation.

stock certificate: Document confirming ownership interest in a corporation.

stockholders: Individuals who own shares in a corporation.

stoppage in transit: The right of an unpaid seller to halt delivery of goods to an insolvent buyer.

stop-payment order: Instruction to a bank to not honor payment of a specific check.

strict liability: Legal responsibility for harm regardless of fault.

subchapter S corporation: Corporation taxed as a partnership.

sublease: Transfer of a lease term to another tenant.

subpoena: Court order requiring testimony in a case.

subrogation: The right of an insurance company to recover from a party causing a loss.

substantial performance: Fulfillment of all but minor details of a contract in good faith.

substitute contract: A new contract replacing an existing one before a breach occurs.

subtenant: Individual to whom a portion of a lease term is transferred.

summary judgment: Motion for immediate judgment based on complaint and answer.

summons: Written notice informing a defendant of a lawsuit.

Sunday laws: Laws regulating transactions permitted on Sundays.

surety: Third party agreeing to be responsible for another’s debt if they default.

suretyship: Promise by a third party to be primarily liable for another’s debt.

surgical insurance: Insurance covering surgical fees for specific operations.

survey: Map showing location, boundaries, and size of real property.

syndicate: A less formal type of joint venture.

 

T

Title Insurance: A type of insurance that protects property buyers and lenders from financial loss due to defects in the property’s title or ownership.

Tort: A civil wrong that results in harm to another person or their property, giving the injured party the right to sue for damages.

Traded Endowment Policy: A type of life insurance policy that can be bought and sold on the secondary market.

Trademark: Distinguishes the source of goods and services, protecting the brand identity of a company. It can be a word, phrase, symbol, design, or sound.

Trade secrets: Valuable information that a business keeps confidential to maintain a competitive advantage. This information can include formulas, processes, designs, or customer lists.

Tacking: Examining periods of occupancy by different owners to determine if title has been acquired through adverse possession.

Tax Escalator Clause: Provision in a lease obliging the tenant to cover increases in real estate taxes.

Tax Lien: Encumbrance granted to a government entity to ensure property tax payment.

Tenancy at Sufferance: Occupancy established when a lease expires, and the tenant is permitted to stay.

Tenancy at Will: Lease agreement without a defined duration.

Tenancy by the Entirety: Joint ownership of property granted to a husband and wife.

Tenancy for Years: Leasehold for a specified timeframe.

Tenancy in Common: Co-ownership by two or more individuals with inheritance passing to heirs or designated beneficiaries.

Tenant: Individual who occupies rented premises.

Tender of Performance: Proposal to fulfill contractual obligations.

Tender Offer: Public bid to purchase stock from shareholders.

Term: Duration of a lease agreement.

Term Insurance: Life insurance acquired for a specific period.

Termination Statement: Public declaration indicating the end of a claimed security interest.

Testamentary Capacity: Mental and physical competence of a person creating a will.

Testamentary Trust: Trust established according to the stipulations of a will.

Testate: Leaving behind a valid will upon death.

Testator/Testatrix: Individual who disposes of property through a will.

Theft: Unlawful taking of property with the intention of permanent deprivation, without force.

Theft of Trade Secrets: Unauthorized acquisition of crucial business information.

Threshold Figure: Minimum amount of medical expenses required before a person can sue under no-fault laws.

Time Sharing: Right to utilize a property for a specific duration annually.

Title: Legal interest held in real estate.

Title Insurance: Policy compensating property owners for damages if title defects are discovered.

Title Search: Investigation of public records to verify the clarity of real estate title.

Torrens System: Public registration system for titles utilizing title certificates.

Tort: Wrongful act causing harm to an individual or their property.

Tort Law: Legal domain addressing private wrongs affecting individuals rather than society at large.

Totten Trust: Bank account held by one person in trust for another.

Trade Acceptance: Seller’s credit instrument in the form of a draft.

Trade Fixtures: Permanent property attached to leased premises, remaining after the lease ends.

Trademark: Distinctive symbol used by a company for identification purposes.

Trading Partnership: Business partnership engaging in commercial activities.

Transient: Individual not permanently residing in a location.

Traveler’s Check: Secure check primarily used by travelers.

Treble Damages: Punitive damages tripled for violation of certain government regulations.

Trespass: Unauthorized entry or stay on another person’s property.

Trust: Arrangement for transferring and holding property for the benefit of another.

Trustee: Individual managing a trust.

Trustor: Person establishing a trust.

Tying arrangement: Agreement where a buyer must purchase other products from the seller as a condition of sale.

U

Unfair Dismissal: Dismissal of an employee that is not for a fair reason or that is discriminatory.

Ultra vires: Acts of a corporation that exceed its authorized powers, whether expressly granted or implied.

Unconscionable agreement: A contract so egregiously unfair or one-sided that it will not be upheld by the courts.

Undisclosed principal: The identity of a principal (the person on whose behalf an agent is acting) that is not revealed to third parties with whom the agent is making contracts.

Undue influence: The exertion of power or dominance to coerce someone into entering a contract against their will.

Unenforceable contract: A legally formed contract that fails to meet certain requirements of the law, rendering it unenforceable.

Uniform Commercial Code (UCC): A set of uniform laws governing commercial transactions across the United States.

Unilateral contract: A contract in which one party promises something in exchange for the performance of an act by the other party.

Unilateral mistake: An error made by one party in a contract regarding certain facts.

Uninsured motorist insurance: Insurance coverage for injuries caused by drivers who lack insurance or by hit-and-run incidents.

Union shop: An arrangement where new employees are required to join a union within a specified period after being hired.

Universal (real) defenses: Defenses against legal claims that are valid regardless of who holds the negotiable instruments.

Universal life insurance: Life insurance that allows the insured to adjust premium payments, face value, and coverage period.

Unliquidated claim: A debt whose exact amount is disputed in good faith.

Unordered goods: Merchandise received even though it was not requested.

Unpaid seller’s lien: The right of an unpaid seller to retain goods sold to an insolvent buyer until payment is received in full.

Unsecured credit: Credit extended solely based on the borrower’s promise to repay.

Unsecured debt: Debt that is not backed by collateral, relying solely on the debtor’s promise to repay.

Usage of trade: Standard customs or widely accepted practices within a particular industry or occupation that can be applied to resolve disputes.

Usury: The practice of charging interest at a higher rate than permitted by law.

V

Valid contract – A contract that includes all essential elements required for legal enforceability.

Valued coverage – The predetermined amount of insurance proceeds agreed upon to be paid out in the event of loss or damage.

 Variance – An exception granted to deviate from the requirements set forth in a zoning ordinance.

 Verdict – The decision reached by a jury at the conclusion of a trial.

 Vested – The status acquired by an employee when they become entitled to receive pension benefits.

 Vicarious liability – The legal responsibility held by an individual for the actions of another party.

 Void contract – A contract lacking legal effect and therefore unable to be enforced.

 Voidable contract – A contract that remains enforceable until the legally entitled party decides to void it.

 Voluntary bankrupt – An individual who initiates the process of bankruptcy by filing a petition voluntarily.

W

Wrongful Dismissal: Dismissal of an employee in breach of their contract of employment.

Wage assignment: When a debtor willingly transfers their wages to a creditor.

Waiver: The voluntary giving up of a particular right.

Waiver of premium clause: A clause in an insurance policy that excuses the insured from paying premiums if they become disabled.

Warehouse operator: Someone who stores personal property for others in exchange for payment.

Warehouse receipt: A document issued by a bailee acknowledging the storage of personal property.

Warranty: A seller’s guarantee that goods are free from defects and suitable for their intended use.

Warranty deed: A deed that ensures the title to a property is clear.

Warranty of habitability: An implicit promise by a landlord that a property is suitable for human habitation and doesn’t pose any hazards.

Warsaw Convention: An international treaty that governs the liability of airlines on international flights.

Whistle-blower laws: Laws that forbid employers from firing employees who report violations of certain laws by the employer.

Whole life insurance: Life insurance where premiums are paid as long as the policyholder holds the policy.

Will: A legal document that outlines how a person’s property should be distributed after their death.

Workers’ compensation: State laws that provide benefits to employees who are injured or fall seriously ill while on the job.

Writ: A formal court order compelling someone to perform a specific action.

Wrongful Death: The death of one person caused by the negligent or intentional actions of another.

X

Y

Z

Zoning Regulations: Local government ordinances that specify how land within a particular jurisdiction can be used, including zoning for residential, commercial, and industrial purposes.