Glossary

A/B trust
A type of Revocable Living Trust used by married couples. In this type of living trust, two trusts (trust A and trust B) are created at the time the first spouse dies. By dividing the couple's estate into two trusts at the first death, each spouse can pass the maximum amount of property allowed to avoid federal estate taxes. One trust, usually trust A, is often referred to as the marital deduction trust and the other trust, usually trust B, is often referred to as the shelter trust.


Absolute gift
A gift of property which has no restrictions placed on it by the donor. The donee (recipient) has absolute control over the property and can keep, sell, transfer, donate, or otherwise make use of it as he or she sees fit.
See Also: Beneficiary, Donee


Acceleration clause
A provision in a financial contract stating that the unpaid balance becomes due and payable upon the occurrence of certain events, such as failure to make payments on time.


Accessory after the fact
A person who is aware that a crime has been committed by another person, and who knowingly assists the felon in some fashion to help him or her hide from or escape punishment for the crime.


Accumulation trust (complex trust)
A type of trust which retains and accumulates income for longer than a year, instead of paying all of the income out to the beneficiaries at least annually. These types of trusts are also known as complex trusts.


Accused
Under Canadian law, a person who has been charged with a criminal offence. In the US court system, he or she would be called the defendant.
See Also: Defendant


Acknowledgement
A formal declaration before an authorized person (such as a notary public) that the document it is attached to is being signed as a free act and deed of the person signing it.


Acquittal
Discharge by a judge or jury from a criminal charge on a verdict of not guilty. The discharge or settlement of a debt or obligation.


Address for service
An address recorded in a court or public registry at which the party recording the address may be served with legal documents. Parties to legal proceedings must provide the court with an address for service. It is also a requirement in some jurisdictions for a landlord to provide tenants with an address for service in the lease / rental agreement.


Adjournment
A postponement of proceedings to a later time. To close at the end of a session. To put off or defer a matter for later consideration.


Administrator of an estate
An individual or corporation appointed by a court to handle the collection, management and distribution of the assets of the estate of a deceased person who dies without making a will, or the estate of a person who dies with a will, but without anyone prepared or able to act as executor. The administrator also has the power to conduct any legal proceedings necessary to satisfy claims of creditors, next of kin, legatees, or other parties who might have a claim to the property of a person who died intestate (i.e. without a Will).


Adult
Any person of legal age. The age at which a person is deemed an adult varies from place to place, depending on the laws.
See Also: Minor


Advance medical directive
A document in which you can nominate a spouse, relative or other person you trust to make medical decisions for you when you are unable to do so, and in which you can set out your wishes as to the extent of medical care you want to receive in the case of imminent death from an irreversible condition, or in the case of a persistent vegetative state. Also referred to as an advance health care directive, a personal directive, or a living will.


Adverse possession
A method of claiming ownership to a piece of property owned by someone else through continuous occupation of the land for a specific period of time, as determined by applicable laws. Squatter's rights are an example of adverse possession.


Affiant
A person making an affidavit.
See Also: Affidavit


Affidavit
A written statement of facts confirmed by the oath of the party making the affidavit, before a lawyer, notary public, commissioner for oaths or other officer having authority to administer oaths. If you make a false statement in an affidavit, it is the same as lying on a witness stand in court. You could be fined or imprisoned.


Affidavit of domicile
A sworn, written statement verifying that the affiant (person making the affidavit) is a resident of a particular city, town, county, state, province or territory. Also known as an affidavit of residency.


Affidavit of survivorship
A sworn, written statement verifying the identity of the survivor in a joint tenancy or other property ownership relationship.


Agency
The relationship formed between principal and agent by a contract - written or verbal - under which the agent is given the authority to represent the principal and to act on behalf of the principal.
See Also: Agent


Agent
A person or party authorized by another person or party to act on his, her or its behalf. An agent can also be called an attorney, attorney-in-fact, or personal representative.


Agreement
A mutual assent between two or more parties to do or refrain from doing something. In legal terms, it usually refers to an instrument in writing that records the assent and arrangement between the parties.
See Also: Contract, Instrument


Agreement for sale
A sale transaction in which the seller receives the sale price over a period of time and retains title to the sold property until all payments are received.


All rights reserved
A statement included in a copyright notice by the copyright holder, notifying all users that it is illegal to copy the material without the permission of the owner.
See Also: Copyright


Amalgamation
The combination or merger of two or more companies. The shareholders of each company would become the shareholders of the new company resulting from the amalgamation.
See Also: Merger


Amortization
Gradual repayment of a debt over a period of time by means of regular installment payments against the principal.
See Also: Mortgage


Annuity
A fund into which an individual makes regular payments, which are then invested. Sums are paid out at regular intervals to the individual at a later date. Annuities are typically used to provide additional income to retirees.
See Also: Retirement fund


Antenuptial agreement
A contract made before marriage between the parties as to their property rights. This is more often called a Prenuptial (or premarital) agreement.


Antitrust acts
Federal and state statutes to protect trade and commerce from unlawful restraint, price discrimination, price fixing, and monopolies.


Apostille
An additional level of authentication required for certain notarized documents to be recognized and accepted internationally, in accordance with the Convention de La Haye, October 5, 1961. The word 'apostille' is French for notation.


Appeal
The process of bringing a lower court decision before a higher court for review and reassessment.


Appellate (appeals) court
A court having jurisdiction to hear appeals and review a trial court's procedure.
See Also: Appeal


Appraisal
An expert's estimate of the value of something, such as real estate, art, antiques, collectibles, business assets, personal property, etc.


Appurtenance
Something on or joined to land which is not part of the land itself, but is of benefit to owners and users of the land. A right-of-way is an appurtenance.
See Also: Fixture, Easement


Arbitration
A formal process by which a panel of one or more arbitrators is chosen by the parties involved in a dispute, to hear and rule on the dispute. The parties agree to accept the arbitrator's ruling as final and binding.


Arbitrator
A person chosen by the parties in arbitration to hear evidence concerning the dispute between the parties and to make an award based on the evidence. An arbitrator must have no interest in the matter under dispute and must render his/her decision in an impartial manner based on a review of the evidence.
See Also: Arbitration


Arm's length transaction
A transaction between two unrelated parties, or if the parties are related, a transaction that is conducted as if they were unrelated, so that there is no question of a conflict of interest.


Arrears
Any amount which is not paid when due, such as mortgage or rent payments.
See Also: Default


Arrest
Placing a person who has been charged with a criminal offence into police custody.
See Also: Crime, Criminal


Asset
Any property (real or personal) that has a dollar value.


Asset protection
Protecting your property from legal problems and taxes during your life and after your death.


Assignee
The party receiving, or benefiting from, an assignment.
See Also: Assignment, Assignor


Assignment
Transfer of ownership of property (real or personal) or certain rights under a contract, deed, or other instrument from one party to another.


Assignor
The party assigning ownership or rights to another party by way of an assignment.
See Also: Assignment, Assignee


Association
Any group which has joined together for a particular purpose, ranging from social to business, and usually meant to be a continuing organization. An association is not a legally-established or incorporated entity, such as a corporation or a partnership.
See Also: Society


Assumption of risk
A doctrine under which a person may not recover damages for an injury received when he has voluntarily exposed himself to a known danger, such as participating in an extreme sport activity or hiking in areas where there are risks from wildlife, avalanche, flooding, etc.


Attachment
The binding of property (real or personal) as security for a debt, such as by mortgage or other security instrument.
See Also: Mortgage


Attestation
A statement by a person who has witnessed another person signing a document to the effect that they did in fact witness the document. It may include statements to the effect that the witness knew the person who signed personally, that the person who signed understood the contents of the document when he signed etc. An attestation can also take the form of a sworn affidavit, generally called an affidavit of witness or affidavit of execution.


Attorney or attorney in fact
A person authorized by another person to act in his or her place, either for a particular stated purpose, or for the general transaction of business or personal affairs. This authority must be conferred in writing under a document called a Power of Attorney. In this context, the word attorney does not refer to legal counsel.
See Also: Agent


Audit
An unbiased examination and evaluation of the financial statements of an organization, performed either internally (by employees of the organization) or externally (by an outside individual or firm). An examination of a taxpayer's return or other transactions by the federal taxing authority.
See Also: Auditor


Auditor
A public officer charged by law with the duty of examining and verifying the expenditure of public funds, or an accountant who performs a similar function for private parties.


Bail
Money or other security (such as a bail bond) provided to the court to temporarily allow a person's release from jail after being arrested and to ensure that they appear in court on the appointed date.


Bailee
A person with whom certain goods or property is entrusted, usually pursuant to a contract of bailment, who is responsible for the safe return of the property to the owner when the contract is fulfilled. The bailee has control over the property during its bailment.
See Also: Bailment, Bailor


Bailiff
An officer of the court charged with certain duties, such as maintaining order in a courtroom during a trial, executing writs and processes, making arrests, etc.


Bailment
The temporary placement of control over, or possession of goods or property by one person (the bailor) into the hands of another (the bailee) for a designated purpose upon which the parties have agreed. The bailee receives only control or possession of the property while the bailor continues to own it. A bailment does not transfer ownership or an interest in the property - it only involves a transfer of possession or custody of the property. For example, when you hand the keys to your vehicle to your mechanic to do work on your car, this creates a bailment because you (the bailor) have transferred possession and control of the vehicle to the mechanic (the bailee). The mechanic, as bailee, is responsible for safely returning the vehicle to you.
See Also: Bailee, Bailor


Bailor
A person who leaves goods or property in the custody of another person (the bailee) who is responsible for the safekeeping and return of the property. Sometimes the bailor is not the owner but a person who is a servant of the owner or a finder who places the goods with the bailee until the owner is found.
See Also: Bailment, Bailee


Balloon note
An instrument that secures a long-term loan (often a mortgage) that does not amortize over the term of the loan and therefore has one large 'balloon' payment due on maturity.
See Also: Promissory note


Bankruptcy
The legal process under which a person or firm declares its inability to pay all of its debts. The person with the debts is called the debtor and the people or companies to whom the debtor owes money are called creditors. Creditors may file a bankruptcy petition against a debtor (involuntary bankruptcy) in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor (a voluntary bankruptcy that is filed by the bankrupt individual or organization).
See Also: Insolvency


Beneficiary
Someone who receives money or gifts under a Will or a Trust Deed.


Bequeath
To give a gift to someone under the terms of your Will.
See Also: Bequest


Bequest
A gift of certain items or sums of money to be bestowed upon a beneficiary when the donor (the person giving the gift) dies.
See Also: Bequeath


Bid bond
A written promise from a bank, insurance company or bond company (the guarantor) submitted to a client along with a bid from a contractor who is bidding for the client's construction project. The bid bond ensures that if the bid is accepted, the contractor will proceed with the contract and must replace the bid bond with a performance bond. Otherwise, the guarantor pays the client the difference between the contractor's bid and the next highest bidder as liquidated damages. Also called a bid guaranty or bid surety.


Bigamy
The state of being married to two spouses at the same time.


Bill
A proposed Act or Statute prior to its being enacted.
See Also: Statute


Blind trust
A trust in which a fiduciary third party trustee (such as a bank) has full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust. Blind trusts are often set up to avoid potential conflicts of interest.
See Also: Voting trust


Board of directors
The panel of persons appointed or elected by the shareholders of a corporation to manage, control and govern the corporation's affairs and plan its future growth.
See Also: Director


Bona fide
Latin for 'good faith'. In law, it refers to an honest, genuine conviction regarding the truth of a proposition. Negotiations or dealings made or carried out in good faith.


Bond
A party's written agreement to pay a certain sum of money if that party does not perform certain obligations as and when they are to be performed.


Bonding company
A bank, insurance company or other firm which provides surety or fidelity bonds, performance bonds, or other types of bonds on behalf of one part (obligor) to another party (obligee).


Breach
The breaking or violating of a law, right, or duty, either by commission or omission. In contract law, the failure of a party to carry out any condition of a contract.
See Also: Default


Break and enter
The act of breaking any part of a premises in order to enter it, usually for the purpose of committing a crime.


Broker
An agent who represents a principal in a transaction.
See Also: principal, Agent


Bundle of rights
A concept in which rights of possession, use, enjoyment and disposition comprise the rights of ownership.


Business
Any enterprise, venture or operation which is undertaking for the purpose of making a profit.


Business alliance
An agreement between related or complementary businesses, usually motivated by the need to reduce costs and improve services for the customer. An example of this is code sharing in airline alliances. Many if not all large airlines participate in one or more business alliances.


Buy-sell agreement
An agreement between business partners or shareholders which sets out important matters concerning their business relationship, including the manner in which the interests of each of the partners or shareholders are to be purchased on retirement and on death.


By-laws, bylaws
A set of rules or laws adopted by an association, corporation, society or other organization to govern the internal affairs of the organization.


Capacity
Having legal authority or mental ability. Being of sound mind.


Capital beneficiary
A person who is entitled to a share of the assets held in a trust. The interest of a capital beneficiary must be distinguished from that of an income beneficiary.


Capital gain
The result of selling a capital asset at a higher price than it cost. Whether an investor makes a capital gain or not depends on the purchase price of an asset compared to its selling price, the effect of depreciation on its value and whether inflation has bitten into the investor's profit margin.


Capital gains tax
A tax on capital gains, which are profits gained from the sale of a non-inventory asset which was purchased for less than the amount for which it was sold. Not all countries have capital gains tax, and capital gains taxes are often levied at different rates for individuals and corporations.
See Also: Capital gain


Case law
Law established by published legal decisions of the courts. The word jurisprudence is sometimes used synonymously with case law.
See Also: Jurisprudence


Cause of action
The facts which give a person a right to seek relief in court.


Caveat
A warning, or a note of caution. With respect to real estate, it refers to a registration recorded on the title deed as a notice about possible or potential defects in the state of the title.
See Also: Lis pendens


Caveat emptor
It means 'Let the buyer beware'. The buyer is purchasing the goods or items at his/her own risk.


Certificate of title
Document issued by a registrar of titles for real estate, which is considered conclusive evidence of the current ownership and state of the title to the property described in the certificate.
See Also: Deed, Title


Certification
Written attestation. Declaration made by an authorized party verifying that an instrument is a true and correct copy of the original.


Charitable remainder trust
A trust used to make large donations of property or money to a charity so the person making the gift or donation can obtain a tax advantage. In a charitable remainder trust, the donor reserves the right to use the trust property during his life or some other specified time period, and when the agreed period is over, the property will go to the charity.


Charter
In Canada, the Charter of Rights and Freedoms guarantees citizens certain civil rights and personal freedoms.


Chattel
An article of personal property.


Chattel mortgage
A mortgage using movable personal property rather than real estate as security, typically used to purchase mobile homes.
See Also: Mortgage


Circumstancial evidence
Evidence which does not prove something directly, but indirectly by inference from the circumstances.


Citation
A writ or order issued by a court commanding the person named therein to appear in court at the time and place specified. Also, written reference to legal authorities in briefs or other legal documents.


Civil action or civil case
A lawsuit brought to enforce or protect a party's private rights.


Civil procedure
The process by which a civil action is tried and appealed.


Claim
A debt owing by a debtor to a creditor. The cause of a civil action by a plaintiff against a defendant.


Clerk of the court
Administrator or chief clerical officer of the court.


Closing date
The date specified in a purchase and sale agreement, on which the purchaser must pay the balance due and the vendor must deliver the property being purchased and the necessary documentation to transfer title. Also referred to as the completion date.


Codicil
A written amendment or addendum to a will.
See Also: Will


Commission
Remuneration paid to an agent for securing a sale or lease, usually calculated as a percentage of the contract price.


Committing waste
A phrase commonly found in leases, usually deemed a material breach of the lease if the tenant commits waste to the property. Committing waste means that the tenant fails to keep the property clean and habitable, causes damage, or decreases the value of the property through neglect.
See Also: Lease, Lessee, Lessor


Common law
A system of law that is derived from judicial decisions rather than statutes or constitutions.


Common property
Any area inside a housing development that is collectively owned by all of the residents. Property belonging to all members of a condominium, strata or commonhold, such as lobbies, stairwells, corridors, parkades, grounds, storage areas, boiler rooms, etc. Also called common elements or common areas.


Commonhold
In the UK, flat ownership similar to a US or Canadian condominium association, in which each flat in a multi-occupancy building is individually wholly owned, common areas are jointly owned, and certain expenses and responsibilities are shared as a group.


Community property
Property acquired by either spouse during a marriage, other than gifts or inheritances given specifically to one spouse, based on the doctrine that property acquired during marriage belongs to the marital community (both spouses).


Compensation
Payment, fee, or reward for the performance of a service.


Compound interest
Interest that is charged on both the original principal of a loan and on the interest that has already accrued.
See Also: Interest


Conciliation
A form of alternative dispute resolution in which the parties bring their dispute to a neutral third party who helps them to communicate with each other and explore possible solutions. Conciliation is similar to mediation, but is less formal.


Concurrent sentence
A sentence of two or more prison terms which must be served simultaneously.


Condemnation
The legal process by which a government takes private land for public use, paying the owners a fair price.
See Also: Eminent domain


Condition precedent
In contract law, a condition that must be met, or an event that must occur, before any contractual duty arises, unless the parties to the contract agree in writing to waive the condition. For example, an offer to purchase a real estate property may contain a condition precedent that the buyer must sell a property that they currently own before the purchase closes. If the buyer fails to sell the other property by the date specified, the offer is withdrawn with no obligation or liability on the part of the buyer.


Condition subsequent
A condition in a contract which refers to a future event which, when it occurs, terminates the contract and relieves the parties of their obligations.


Condominium
A form of property ownership in which the homeowner holds title to an individual dwelling unit, an undivided interest in common areas of a multi-unit project, and sometimes the exclusive use of certain limited common areas, such as balconies, patios, storage lockers, and parking spaces. All unit holders are jointly responsible for the maintenance and repair of the commonly owned areas. The common areas are owned and managed by a condominium corporation made up of the owners of the units.


Confidential information
Any document or item bearing the classification confidential. Any information, records, data, processes or material designated as confidential by the owner thereof.
See Also: Confidentiality


Confidentiality
In the legal sense, it denotes the maintaining of strict privacy or secrecy with respect to the information and data of parties involved in a negotiation, transaction, or proceeding.


Consecutive sentence
A sentence of two or more prison terms to be served one after the other.


Conservator
A guardian, protector or preserver, generally appointed by a court to care for the property of another, such as a dependent adult.


Conservatorship
Legal right given to a person to manage the property and financial affairs of a person deemed incapable of doing so for him/herself.


Consideration
The price paid by one party to another under a contract in exchange for goods, services, promises, or rights.


Consignment sale
A method of selling in which the owner or maker of goods (consignor) leaves them in the hands of a seller (consignee) who will handle the sale of the goods, but ownership remains with the consignor until the goods are sold.


Constitution
The fundamental law of a country or state which establishes the character and basic principles of the government.


Constructive trust
A relationship in which a party who has wrongfully obtained title to property has an equitable duty to transfer it to the party to whom it rightfully belongs, on the basis of unjust enrichment or fraud.
See Also: Trust


Contract
An agreement between two or more parties which creates an obligation to do or not to do a particular thing. A legal enforceable agreement between two or more parties made either orally or in writing.


Conveyance
An instrument transferring the title to real property (land, buildings) from one person to another. Also called transfer of title.


Conviction
A judgment of guilt against a criminal defendant.


Copyright
The ownership of and exclusive right of control over creative and artistic works, such as books, stories, screenplays, movies, musical compositions, paintings, photographs, and software.


Corporation
A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation can enter into contracts, borrow and lend money, sue and be sued, hire employees, own assets and pay taxes.


Corpus
The assets and property of a deceased person which form the body of the deceased's estate.
See Also: Beneficiary, Donee


Counsel
A legal adviser, used to refer to lawyers in a court case.


Counterclaim
A claim made by a defendant in a civil lawsuit against the plaintiff.


Court
A body of government to which the administration of justice is delegated.


Court costs
The expenses of prosecuting or defending a lawsuit, other than the attorney's fees. Often recoverable from the prevailing party against the losing party.


Court order
A direction issued by a court or a court official (judge, magistrate, etc) requiring or authorizing certain actions to be taken out by one or more parties to a case. Examples of court orders are writs, restraining orders, and warrants.
See Also: Writ


Court rules (or rules of court)
Regulations governing the practice and procedures to be followed in a court case. Each court has its own rules.


Covenant
A promise or agreement contained in a deed or contract which creates an obligation on a party to perform a certain act or, conversely, forbids the party from doing something.


Creative commons license
A form of copyright licensing created by Creative Commons that gives the owner the ability to specify how others can use, copy and distribute their work. The user must give the owner credit and can only use the work on the conditions specified by the owner.


Credit
The ability to buy without money on condition that you pay later. Those using credit benefit from the immediate possession of the goods they desire; those giving credit benefit by charging interest on the deferred payments.


Credit rating
A measurement of the credit worthiness of an individual or business. The ratings are based on the opinions of banks, financial institutions and financial analysis after investigating the party's stability and credit history.
See Also: Credit risk


Credit risk
The danger that a borrower will not repay a loan. The degree of risk is assessed by a credit analysis and is normally reflected in the interest rate and other conditions imposed by the lender.
See Also: Credit rating


Creditor
A party to whom a debt is owed by another (the debtor).
See Also: Debtor


Crime
An act in violation of the laws of a country or state.
See Also: Criminal


Criminal
A person who commits a crime. Of, or relating to, crime or its punishment. Also used informally to describe senseless or deplorable behavior.
See Also: Crime


Criminal justice system
The network of courts and tribunals which deal with criminal law and its enforcement.
See Also: Court


Crown prosecutor
The title given in a number of jurisdictions (England, Wales, Canada, Australia, New Zealand) to the state prosecutor, the legal party responsible for presenting the case against an individual in a criminal trial. The Crown Prosecutor fulfills the role that a district attorney fills in the American judicial system.


Custodial Parent
The parent given custody and responsibility by the divorce court for the children of the divorced couple.


Custody
Detaining of a person by lawful process to assure that he/she appears in court. The jailing or imprisonment of a person convicted of a crime. The act or right of guarding a child or dependent, as granted by the court.


Damages
Money claimed by, or ordered to be paid to, one party by another party as compensation for loss or injury.


Dealer
A person or company that is engaged in buying and selling.
See Also: Distributor


Debenture
An unsecured bond backed solely by the general credit of a company.


Debtor
One who owes a debt to another. A person filing for relief under bankruptcy laws.
See Also: Creditor


Decedent
The person who has died, in relation to estate probate and administration matters.


Decree
An order of the court. A final decree is one that fully and finally disposes of the litigation.


Deed
A certificate used to evidence ownership and/or transfer title to real estate. A special form of written contract or binding commitment or obligation. The main difference between a deed and a contract or agreement is that there is no requirement for consideration in order for the deed to be binding. A deed cannot be changed, it can only be revoked or canceled.


Defamation
An intentional false communication either published or spoken publicly, that injures a person's reputation or good name, or damages the esteem, respect, goodwill or confidence which others hold for that person.
See Also: Slander, Libel


Default
Failure by a party to do what was legally or morally required, often referring to the failure to perform an obligation by a certain date (such as making a payment).
See Also: Breach, Arrears


Defendant
In US law, a person defending or denying a criminal charge. In Canada, the defendant is referred to as the accused.
See Also: Accused


Defense (defence)
The argument given in court by a party accused of a criminal wrongdoing, which presents evidence why the accused is not guilty of the charges. Alternate spellings: defense in the US, defence (in Canada, UK, Australia, New Zealand).
See Also: crime, defendant, Accused


Dependent
A person whose existence relies on another (such as a child's relationship with its parents). Also spelled 'dependant'.


Deposition
Testimony of a witness or a party taken under oath outside a courtroom, the transcript of which becomes part of the court file.


Depreciation
A loss in value of an asset due to the passage of time, wear and tear, or other cause.


Devise
A legal term referring to real estate which passes through a will.


Director
A member of a group of people elected or appointed to manage the affairs of a corporation or organization. In the film industry, a person who controls and supervises the production of the motion picture, and gives instructions to the cast and crew.


Disbarment
Form of discipline against a lawyer resulting in the temporary or permanent suspension of the lawyer's license to practice law.


Discharge
In bankruptcy, a court's formal discharge of a debtor's debts. In probate, the release of the estate's executor or administrator from any further fiduciary responsibility.


Disclaimer (renunciation)
In estate administration, the refusal of a beneficiary to accept property willed to him. When a disclaimer is made, the property is generally transferred to the person next in line under the will. Generally in law, a renunciation of one's right or claim, or a repudiation or denial of responsibility or connection.


Discovery (or discoveries)
The compulsory disclosure of pertinent facts or documents to the opposing party in a civil action, usually before a trial begins.
See Also: Deposition


Disinherit
To cut a person off from his or her inheritance in an estate where he or she would have been a natural heir.


Dissolution
The termination (either voluntary or involuntary) of a corporation's legal existence. Dissolution may be caused by action or inaction, including failure to file annual reports, failure to pay certain taxes, bankruptcy, or voluntary dissolution of the corporation by the shareholders and directors.


Distributor
Firm or individual, particularly a wholesaler, who sells or delivers merchandise to customers, such as retail stores. Distributors act as intermediaries between manufacturers and retailers. They maintain a warehouse of merchandise, which is often purchased from many different manufacturers and then is sold (distributed) to various retailers. By buying through a distributor, a retailer can have the advantage of one-stop shopping, rather than having to make individual stock purchases from each of the different manufacturers.


Distributor
A person or company that markets or sells goods to merchants rather than to end users, such as a wholesaler who buys goods from a manufacturer and supplies them to the retail outlets.
See Also: Dealer


District attorney
In the American legal system, a district attorney (DA) is an attorney who is elected or appointed to the office, and who represents the government in prosecuting criminal cases.


Domicile
The residence where a person has his/her permanent home and to which he/she intends to return.


Dominant tenement
Property that carries a right to use a portion of a neighboring property.


Donee
A person who receives a gift.
See Also: Donor


Donor
A person who makes a gift. Also, the person who makes a Power of Attorney.
See Also: Donee


Double jeopardy
Putting a person on trial more than once for the same criminal charge.


Double net lease
A commercial lease agreement in which the tenant pays taxes and insurance on the property, while the landlord pays for maintenance and repairs.


Dower rights
Rights guaranteed by law in certain jurisdictions providing that a surviving spouse is legally entitled to all or part of his or her deceased spouse's real estate as long as he or she lives.


Due diligence
Steps taken and a level of care exercised by a prudent person to avoid harm or loss to other persons or their property. Research, fact finding and analysis of a company and its finances and organization in preparation for a specific business transaction (such as a purchase of the company).


Due process of law
A person's right to receive the guarantees and safeguards of the law and the judicial process.


Due-on-sale clause
A clause in a mortgage document which requires that the mortgage must be paid in full if the encumbered property is sold or transferred.


Durable power of attorney
A document established by an individual (the principal or donor) granting another person (the agent or attorney) the right and authority to handle the financial and other affairs of the principal. The Durable Power of Attorney survives through the period of incompetency of the principal.


Durable power of attorney for health care
A document established by an individual (the principal or donor) granting another person (the agent or attorney) the right and authority to handle matters related to the health care of the principal.


Easement
A right given by a landowner to another person or entity, to trespass upon the landowner's property. Almost all properties have easements registered on their title, such as the right for utility companies to access utility lines or run cables through the property.
See Also: Appurtenance


EBIT
Earnings before interest and taxes. Other related expressions include:

EBITD - earnings before interest, taxes and depreciation.
EBITDA - earnings before interest, taxes, depreciation and amortization.


E-commerce
A type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over the internet. Electronic commerce operates in all four of the major market segments: business to business (B2B), business to consumer (B2C), consumer to consumer (C2C) and consumer to business (C2B).


Embargo
A proclamation of government prohibiting the departure of ships or goods from port, usually issued in time of war or hostilities. A legal prohibition of commercial trade with a certain nation.


Eminent domain
A power granted to a government to take over private property for public use through condemnation.
See Also: Condemnation


Employee
A person who works for compensation, whether direct or indirect, for another in return for stipulated services. An employee may work on an hourly, daily, or annual wage basis.


Employer
Someone who hires and pays wages, thereby providing a livelihood to individuals who perform work. The employment relationship confers authority on the employer, who has the right to control and direct the work to be performed. An employer also has the right to engage or discharge and furnish the working location and supplies. An employer is responsible for the collection and remission of taxes and other statutory remittances from an employee's wages.
See Also: Employee


Encroachment
Entry into or onto another's property without their permission and without the right to do so. An unauthorized extension of the boundaries of a landowner's property onto another property.
See Also: Right of way


Encumbrance
A lien, claim or charge against property or the right to use the property, recorded by a person who is not the owner of the property.


Entity
A person, corporate body or legally recognized organization.


Entrapment
The act of inducing a person to commit a crime so that a criminal charge will be brought against him or her.


Equity
In real estate, the difference between the value of the property and the amount that the owner owes on the property. With respect to corporations, it refers to ownership interest in the form of shares of stock.


Escheat
The reversion of real property to the government, in a situation where the property owner has died intestate (without a will) and with no legally qualified heir to whom the property would pass by the laws of succession.


Escrow
An arrangement where a neutral third party holds money, documents or property until all conditions of an agreement are met, after which the item(s) held in escrow are released to the appropriate party. An escrow fund is also called a trust fund.


ESOP
An employee stock option plan (ESOP) is a plan established by a company as an incentive to attract and retain the best people. Employees receive options to purchase shares, and the company often receives a tax benefit.


Estate
All of a person's assets and property (both real and personal property). Everything that you own forms part of your estate.


Estate tax
A tax levied on the transfer of property under the terms of a Will.
See Also: Inheritance tax


Estoppel
A person's own act, or assertion of facts, which preclude his or her later making claims to the contrary.


Ethics
In business, a set of principles and rules of proper conduct, established as a code of practice for a particular group, profession or industry.


Eviction
Removal of a tenant from rental property by a law enforcement officer. First, the landlord must file and win an eviction lawsuit, also known as an unlawful detainer.


Evidence
Information given in testimony or in documentation that is presented to a judge or jury to enable him / them to decide a legal action for one side or the other.
See Also: Testimony


Ex parte
On behalf of only one party, without notice to any other party.


Execute
To sign a document, or to carry out the terms of a document.


Executor
A person or institution named in a decedent's will and given the power and authority to distribute the decedent's estate.


Export
To ship or distribute goods or services into other countries for the purpose of selling.
See Also: Import


Express trust
A trust arrangement created by a written trust agreement or declaration.


Expungement, expunging
The process by which the record of a criminal conviction is destroyed or sealed.


Extortion
Wrongfully forcing a person to do something through the use of threats and intimidation.


Extradition
Surrendering an accused criminal from one jurisdiction to another.


Fair market value
The value for which a reasonable seller would sell an item of property and which a reasonable buyer would pay for it.


Family law
Areas of the law pertaining to families, including marriage, divorce, child custody, juvenile, paternity, adoption.


Family trust
Another name for a living trust.
See Also: Living trust


Fee simple
A form of freehold ownership of land that is recognized in all common law countries as the highest possible ownership interest that can be had in real property.


Fiduciary
A person or institution who manages money or property on behalf of another and who must exercise the highest standard of trust and care imposed by law. A fiduciary would be someone like a trustee, executor, personal representative, or conservator.
See Also: Fiduciary duty


Fiduciary duty
The duty of a fiduciary to act in a position of trust, good faith, candor and responsibility, on behalf of another. This duty is one of the best defined responsibilities under the law and is very strictly enforced by the courts.
See Also: Fiduciary


Fixture
A permanent improvement to real property that may not be removed at the expiration of the term of lease or the sale of the property.
See Also: Appurtenance


Foreclosure
A court proceeding commenced by a mortgage lender (mortgagee) when a borrower defaults in repayment, to vest title to the property in the mortgagee and to seek a judgment against the borrower for any deficiency.
See Also: Power of sale


Forfeiture
A cancellation, a legal action whereby a contract purchaser loses all interest in the property after defaulting on its obligations.


Forgery
A false document made with the intent of fraudulently using it or having another party rely or act upon it. Also refers to the act of making false documents.
See Also: Fraud


Franchise
License granted by a franchisor to a franchisee to operate a business where the franchisee agrees to use the franchisor's name, products, services, promotions, selling, distribution, display methods, and other elements of its business system. The term also applies to the specific territory or outlet involved in such a right.


Franchisee
A person or company that is granted a franchise to market and sell a franchisor's goods or services in a certain defined area.


Franchisor
The entity or person owning the rights or license of the business system that is being franchised. The franchisor (or franchiser) grants the license or permission to the various franchisees.


Fraud
False representation intended to deceive another party. The use of deception for unlawful gain.
See Also: Forgery


Fully paid up shares
Shares for which full consideration has been received by the issuing company.
See Also: Shareholder


Garnishee
An individual who holds money or property that belongs to a debtor which is subject to an attachment proceeding by a creditor. The employer of the debtor may be served with a court order (or garnishee summons) ordering the employer to pay a portion of the debtor's salary to the creditor. In this case, the employer is the garnishee.
See Also: Garnishment


Garnishment
A legal proceeding in which money owed to or belonging to a debtor but in the possession of another (a garnishee) is applied to the debts of a debtor, such as when an employer is ordered by a court to garnish a debtor's wages and pay the garnished amount to a creditor.
See Also: Garnishee


General partnership
A partnership in which all partners share the management of the business, and each partner is personally liable for the all the debts and obligations of the business. This means that each partner is responsible for, and must assume the consequences of, the actions of all the other partners.
See Also: Partnership


General power of attorney
A legal document that, when properly executed, gives one person (the agent or attorney-in-fact) full legal authority to act on behalf of another (the principal or donor). The scope of the document can be as broad or narrow as you desire as defined in the document. A general power of attorney becomes invalid when the principal dies or becomes incompetent.


Gift
A voluntary transfer of property or assets from one party to another, without consideration or payment therefor.


Globalization
The integration and free transfer across national boundaries of trade, economic and financial markets, technological advances, media and communications.


Good faith negotiations
Negotiations carried on honestly and with a sincere intention to deal fairly with other parties.


Grant
In real estate, a term used in deeds of conveyance to indicate a transfer of an interest or estate in land from the grantor (party transferring the land) to the grantee (party receiving the land).
See Also: Grantor, Grantee


Grantee
A party to whom an interest in real property is conveyed under a deed.
See Also: Grant, Grantor


Grantor
A person who establishes a trust, often also referred to as a Trustor or a Settlor. In real estate, a party transferring real property under a deed of conveyance.
See Also: Trustor, Settlor, Grant


Gross lease
A commercial lease under which the tenant pays the rent and the utility and communications bills for the property, and the landlord pays all the other property expenses, including taxes, repairs, maintenance, insurance, etc.


Guarantee
A guarantee (or guaranty) is a promise made by one party (the guarantor) to pay the debts or perform the obligations of another party, and is often provided as an inducement to have a lender or a landlord enter into an agreement with the second party.
See Also: Guarantor


Guarantor
A party who guarantees repayment of a loan or performance of another party's obligations under a lease or contract, using their own assets if necessary. The guarantor is usually a related party - in the case of a company, this would mean a director, shareholder, partner, etc. In the case of an individual, it would be a spouse or family member.
See Also: Guarantee


Guardian
A person lawfully charged with the duty of taking care of and managing the property and rights of another person who is considered incapable of administering his / her own affairs because of problems due to age, lack of understanding or lack of self-control.


Guardianship
A legal right given to a person (guardian) to be responsible for the food, housing, health care, and other necessities of life for a person who is deemed incapable of providing these necessities for himself / herself.


Habeus corpus
Translation from the Latin, literally "you have the body". A writ of habeus corpus is a mandate from a judge requiring a prisoner to be brought before the court to determine whether the government has the legal right to hold or continue to hold them in custody.


Health care proxy
A legal document in which an individual designates another person to make health care decisions if he or she is rendered mentally or physically incapable of making their wishes known.


Heirs
Those who take title to an intestate person's real property by descent. A living person has no heirs, only heirs apparent.
See Also: Inherit, Intestate


Hell or high water clause
A 'hell or high water' clause in a commercial lease provides that the lessee must make the lease payments regardless of the circumstances and regardless of any right that the lessee may have for set-off or counterclaim against the lessor.
See Also: Lessor, Lessee, Lease


Hold harmless
To relieve another party from responsibility or liability for any damage or loss.
See Also: Indemnity, Indemnify


Holding company
A company that controls one or more other companies, usually by holding a majority of the shares in each one. Holding companies usually do not supply goods or services themselves, their main purpose is to hold stock in other companies.


Holdover tenancy
That period of time following the expiry of a fixed-term lease during which a tenant remains in possession of the rental premises. Holdover tenants pay rent on a monthly or weekly basis, but otherwise the tenancy is usually on the same terms as the expired lease. A holdover tenant can be removed by issuing a notice to quit and if they don't leave, they can be evicted under appropriate law.


Holographic will
A handwritten will, totally in your own handwriting, signed and dated. Holographic wills are not recognized as valid in some places.
See Also: Will


Homeowner association
A corporation set up by a real estate developer to market and sell homes and lots in a residential subdivision, and to manage the property until the responsibility can be transferred to the homeowners (typically this occurs after a predetermined number of homes / lots have been sold). A buyer of a home or lot in the subdivision automatically becomes a member of the corporation upon completion of the purchase.


Homestead laws
Laws which protect your house, clothing, and personal property, up to a specific dollar amount, from being taken away by most types of lawsuits or bankruptcies.


Homicide
Causing the death of another person.
See Also: Murder


Hostile takeover
Forcing a transfer of controlling interest of a corporation from one group of shareholders to another, with the aim of replacing current existing management. Usually accomplished through a public tender offer.


Implied contract
A contract not created or evidenced by the explicit agreement of the parties, but rather one inferred by law, such as the use of a utility in your home implies a contract with the utility company.
See Also: Contract


Implied trust
A trust arrangement not created by a written trust agreement, but which is inferred by the circumstances.


Import
To bring foreign made goods or services into the country for sale domestically.
See Also: Export


In specie
Assets are distributed from an estate in specie if they are distributed in their present form. The alternative would be to sell them and distribute the cash proceeds.


Incapacity
The lack of ability, legal qualification or fitness to discharge a required duty. A person who is legally incapacitated is incapable of managing his or her own business affairs. A person may be permanently or temporarily incapacitated. A probate court usually decides if a person is incapacitated or not.
See Also: Incompetency


Income beneficiary
A person who is entitled to share in the income earned on assets held in trust.


Income splitting
An arrangement which has the effect of transferring income from a high tax-rate person to a low tax-rate person so that the overall tax liability is reduced.


Income tax
A tax assessed on income made by an individual or entity.


Incompetency
The lack of ability, legal qualification or fitness to discharge a required duty.
See Also: Incapacity


Indemnify
To compensate another party for damage or losses incurred due to a breach, default, misrepresentation, action or failure to act by the party making the indemnification. To give security against future liability or damage.


Indemnity
A legal document given by one party to another, exempting them from liability and promising to indemnify and protect them against future loss.


Indenture
A document, agreement or deed expressing certain benefits and obligations of the parties. It primarily applies to secured transactions such as mortgages, loans, and bond issues.
See Also: Mortgage


Independent contractor
A person who contracts to do a piece of work according to her or his own methods and is subject to another's control only as to the end product or the final result of the work. The contracting party need not pay social security taxes and the like; the independent contractor must instead pay his/her own taxes and remittances. A contractor is not an employee.
See Also: Employee


Indictment
A document filed in court at the outset of a criminal trial stating the charges against the accused.


Infant
A person who has not reached legal age in the governing jurisdiction. Also referred to as a minor.
See Also: Minor


Inherit
To receive property or a title from an ancestor by legal succession or will. To receive by bequest or as a legacy.
See Also: Heirs


Inheritance tax
A state tax on property that an heir or beneficiary under a will receives from a deceased person's estate. This tax must be paid by the heir or beneficiary.
See Also: Estate tax


Injunction
A prohibitive order or remedy issued by a court at the suit of the complaining party, which forbids the defendant to do something which he is threatening or attempting to do, or it may require him to perform an act which he is obligated to perform but refuses to do.


Insolvency
A state of insolvency exists when a debtor's total debt exceeds the value of all of its property. The debtor is then deemed insolvent.
See Also: Bankruptcy


Instrument
A written deed, contract or other legal document.
See Also: Deed, Contract


Insurance trust
An irrevocable trust used to hold insurance and pass it on to the beneficiaries without any estate taxes on the death benefits of the policy.


Intangible assets
Nonphysical items such as stocks, bonds, bank accounts, and pension benefits that have value and must be taken into account during estate planning.


Intellectual property
Intellectual property includes copyright, trademark, patent, industrial design, computer code, business systems, processes and trade secrets (confidential information).


Inter vivos
An inter vivos transaction is one that is carried out during a person's lifetime rather than after death, such as an inter vivos (or living) trust.
See Also: Living trust


Interest
The amount which is charged for the use of borrowed money, calculated as a percentage of the amount which has been borrowed.


Interlocutory
Temporary, interim, not final.


Intestacy
The state of being intestate, that is, of dying without having made a valid will or without having disposed of all of one's property by means of a Will.


Intestate
The term used to describe the estate of a person who dies without leaving a will.
See Also: Intestacy


Intestate succession
The order of persons entitled to received property distributed by a state court when the deceased person failed to write a will or trust, or the will or trust has failed to legally distribute the decedent's property.
See Also: Heirs, Intestacy


Investment expenses
Expenses which may restrict an individual's ability to use the capital gains deduction. These expenses include net rental losses, interest on funds borrowed to acquire passive investments, losses from interests in limited partnerships and a percentage of certain tax shelter deductions.


Investment income
Income of an investment nature that offsets investment expenses and makes it easier to use the capital gains deduction. This income includes dividends, interest and income from rental properties.


Involuntary manslaughter
The unlawful killing of a person unintentionally caused by an illegal act or an act which constitutes such disregard of probable harmful consequences that it constitutes wanton or reckless conduct.
See Also: Manslaughter, Murder


IPO (Initial public offering)
An initial public offering (IPO) refers to a first offering of shares or stock for sale to the public by a company looking to raise capital. IPOs are typically issued by smaller, younger companies wanting to expand their businesses, but can also be done by large privately-owned companies which are seeking to become publicly traded.


Irrevocable trust
A trust that cannot be changed, cancelled, or revoked once it is set up.


Issue
1. All persons descended from a common ancestor; one's children, grandchildren, etc. either through birth or adoption. 2. A disputed point between parties in a lawsuit. 3. To send out officially, as in to issue a court order.


Joint and several liability
A legal doctrine that makes each of the responsible parties liable for all of the damages if the other party or parties cannot pay. For example, if a landlord signs a lease with 2 tenants, both tenants are jointly and severally responsible for paying all of the rent.


Joint ownership
The situation where two or more people own the same piece of property together. The property can be owned by the people as joint tenants, tenants in common, tenants by the entirety and other legally defined relationships.


Joint tenancy
A form of co-ownership where two or more persons hold title to property jointly with equal rights during their lifetimes, with the survivor(s) to receive the entire property upon the death of one of them. Each of them simultaneously owns 100% of the property, or has full rights to the property. At the death of one joint tenant, his or her share immediately transfers to the ownership of the survivor(s).


Joint venture
A joint venture is a business venture between two or more parties which takes the form of a short or fixed-term partnership. A joint venture is a preferred vehicle for a business venture with a foreseeable end date, or for a specific project or objective, such as researching and developing a new product or technology, access to new markets and distribution networks, or sharing a business risk with other venturers. Joint ventures are popular between businesses located in different countries to expand their respective markets, and this can give rise to jurisdictional and cultural issues. Problems can also result from insufficient leadership and support, or an imbalance in the amount of expertise, capital and assets brought into the venture by the various co-venturers.


Judge
An elected or appointed court official who has the authority to preside over trials and hearings, and supervise the court process.


Judgment debtor
One who owes money as a result of a judgment in favor of a creditor.


Judgment or judgement
The official decision of a court as to the rights and claims of parties to a legal action.


Judiciary
The branch of government invested with judicial power to interpret and apply the law; the court system; the body of judges.


Jurisdiction
The power or authority of a court to hear and try a case; the geographic area in which a court has power or the types of cases it has power to hear.


Jurisprudence
The study of law and the structure of the legal system.


Jury
A group of men and women selected according to law and sworn to try a question of fact or indict a person for public offence.


Justice of the peace
In Canada, an officer of the court who has the authority to handle a variety of matters, such as presiding over bail hearings, setting court dates, and hearing provincial offence cases.
See Also: Judge


Landlord
A person, company or entity that owns and rents land, houses, apartments or other living accommodations to tenants. Historically also used to denote someone who runs an inn or lodging house.
See Also: Lessor, Tenant


Larceny
Obtaining property by fraud or deceit.


Law
Rules and principles of conduct promulgated by legislative authority, derived from court decisions and established by local custom.


Lawsuit
An action or proceeding between two or more private parties in a civil court.


Lease
A contract which conveys the right to use and occupy a rental property for a specified period of time in exchange for compensation in the form of rent. A contract for the right to hold and use equipment, vehicles and other items for a specified period, in exchange for a daily, weekly, monthly or yearly lease fee.
See Also: Lessee, Lessor


Leasehold improvements
The structural changes made to a leased commercial premises to adapt it for the needs of a specific tenant. The cost of the improvements may be paid either by the landlord or the tenant - this is a negotiation point of most leases. Leasehold improvements are classed as depreciable assets for tax purposes. (Also referred to as build-outs.)
See Also: Lease, Lessee, Lessor


Lease-to-own
A lease arrangement where the lessor gives the lessee the right to purchase the leased goods or property after a certain period of time, for a specified purchase price. The lessee is not obligated to exercise that right. Usually part of the lease payments made over the duration of the lease will go towards the purchase price.

Lease-to-own contracts can be applied to either real property (house, apartment, etc) or personal property (equipment, vehicles, etc). Also referred to as a finance lease or hire purchase.
See Also: Lease


Legal aid
Professional legal services provided at a reduced rate or at no cost to parties who are unable to afford those services.


Legal description
In real estate, a written description by which a property can be definitely located. The legal description appears on the title deed and on all items registered against the title (mortgages, liens, charges, encumbrances, etc).


Legal process
A formal paper that is legally valid; a writ, order or mandate issued by a court.


Legislation
The act of preparing and enacting laws; the laws that are enacted by a legislating body, in contrast to court-made laws.


Legitimate
That which is legal, lawful, and recognized by law or according to law.


Lessee
A person, company or entity to whom a lease is granted. The lease may be for land, buildings, equipment, vehicles or other items. Also referred to as a tenant.
See Also: Lease, Lessor, Tenant


Lessor
A person, company or entity that grants a lease to a lessee. The lease can be for land, buildings, equipment, vehicles, etc. A lessor of land or buildings is also called a landlord.
See Also: Landlord, Lessee, Lease


Letter of credit
A commitment in writing issued by a buyer's bank to a seller's bank, which guarantees payment of a specified sum of money upon certain conditions being met (such as submission of a number of documents) within a specified period of time. Also called an L/C. Letters of credit are usually used where the selling party is unwilling to extend credit to the buying party, as in the case of an exporter in one country selling to an importer in a foreign country. They can be revocable or irrevocable.
See Also: Export, import


Letter of intent
A letter of intent (LOI) is a written statement between parties to a negotiation that sets out the points that the parties have agreed to in principle, and acknowledges the willingness and ability of the parties to do business together. Also sometimes called a letter of intention or memorandum of understanding (MOU).


Letters of administration
A court-issued document giving a person the right to administer the estate of a person who dies without leaving a will.


Letters testamentary
A formal document issued by a probate judge giving a personal representative authority to conduct business, contract, sell estate property, pay bills, distribute estate property, and otherwise act on behalf of the estate.


Liability (liable)
Legal responsibility; the state of being legally obliged and responsible. Exposure to damage, either legal or financial. In business law, liability refers to the responsibility for a company's debt or other obligations. In an accounting sense, the word refers to a claim on a company's assets, such as a loan, charge, mortgage, lien, etc.


Libel
Published defamation which may injure or harm a person's reputation.
See Also: Slander, Defamation


Lien
A legal claim or attachment against real or personal property as security for payment of an obligation arising with respect to that property. For instance, a mechanic hired to fix a vehicle will have a lien against the vehicle until the work has been paid for.
See Also: Mechanic's lien


Life annuity
An annuity that is payable throughout the life of the annuitant. There may be a guaranteed minimum pay-out period or a joint and last survivor option under which payments continue until the death of the survivor of the taxpayer and his or her spouse.


Life estate
The right to have all of the benefit from a property during one's lifetime. The person with the right doesn't own the property, and when he or she dies, the property is not included in his or her estate.


Life insurance trust
A type of irrevocable trust used to hold life insurance to protect it from estate taxes.


Limited liability company (LLC)
A company structure in which shareholders limit their liability exposure to their percentage of ownership or equity interest in the company. Shareholders' personal assets are protected in the event of business-related lawsuits. All income and expenses are attributed to the stockholders of the LLC. According to the LLC agreement, the stockholders can allocate income and its resultant tax liability the same way as partners in a partnership.


Limited partnership
A partnership consisting of one or more general partners who manage the business and who are personally liable for the debts and obligations of the partnership, and one or more limited partners whose liability is limited to the amount of their investment, provided that they do not take part in managing the partnership.
See Also: Partnership


Liquidation
The process of converting stock or other assets into cash. When a company is liquidated, the cash obtained is first used to pay debts and obligations to holders of bonds and preferred stock. Whatever cash remains is distributed on a per-share basis to the holders of common stock, as provided in the articles or by-laws of the company.
See Also: Winding up


Lis pendens
A legal document giving notice that an action or proceeding is pending in the courts which affects the title to the property described in the document.
See Also: Caveat


Listing agreement
An oral or written agreement between a property owner and a real estate broker which authorizes the broker to list the property for sale or lease.


Litigant
A party engaged in a lawsuit. The term applies to both plaintiffs and defendants
See Also: Lawsuit, Litigation


Litigation
A lawsuit commenced to determine and enforce a party's legal rights. The term includes all proceedings in the action.
See Also: Lawsuit, Litigant


Living trust
A form of revocable trust under which the settlor is also the trustee, allowing the settlor to retain full control over all property held in trust during his / her lifetime. A living trust is generally used to avoid probate of the settlor's estate after death, and to help eliminate or reduce estate taxes for married couples. Also called a family trust.
See Also: Family trust


Living will
A written document made by a competent adult declaring that if he/she becomes terminally ill and incompetent, life-sustaining procedures should not be used to postpone his/her death.


Malfeasance
Misconduct or wrongdoing, especially by a public official or someone who holds a position of trust.
See Also: Misfeasance


Malpractice
Professional misconduct by a doctor, lawyer or other professional.


Manslaughter
The unlawful killing of another person without the intent to kill, either voluntary (on impulse) or involuntary (during the commission of an unlawful act, such as a robbery).


Market value
The best price which a property or item would bring if offered for sale on the open market, allowing a reasonable time to find a willing buyer, with neither party acting out of necessity, compulsion or under unusual or special circumstances.
See Also: Valuation


Marketable title
With respect to real property, title that is readily transferable to a purchaser because it is free of defects and claims by outside parties.


Master franchise
A franchising approach in which the franchisor hires a person or firm (called a master franchisee or sub-franchisor) to take over the control of and responsibility for franchising activities in a defined territory, to recruit, train and provide support and services to the franchisees within that territory.


Mechanic's lien
A claim filed against land by a company or individual who has supplied labor, materials and/or equipment for improvements to the property. This term applies to the construction industry, and does not usually denote a lien filed by a mechanic for vehicle repairs.
See Also: Lien


Mediation
A form of alternative dispute resolution in which the parties bring their dispute before a neutral third party mediator, who helps them agree on a settlement.


Memorandum
An informal note or instrument embodying something that the parties wish to put in writing.


Memorandum of understanding
A memorandum of understanding (MOU) is a written statement between parties to a negotiation that sets out the points that the parties have agreed to in principle, and acknowledges the willingness and ability of the parties to do business together. Also referred to as a letter of intent (LOI).


Merger
The formation of one company from two or more previously existing companies through pooling of common stock, cash payment or a combination of both. Mergers where common stock is exchanged for common stock are nontaxable and are called tax-free mergers.
See Also: Amalgamation


Metes and bounds
A description of land whereby all boundary lines are set forth by use of terminal points and angles. Mete refers to a limiting mark, and bounds refers to boundary lines.


Minor
A person who has not reached the age of majority or legal competence; someone who is not yet an adult under the law. The age of majority differs from place to place. In courts of law, often referred to as an infant.
See Also: Infant


Minute book
In court cases, a book maintained by the courtroom bailiff which contains minute entries of all hearings and trials conducted by the judge. A book maintained by the secretary of a corporation, company or other corporate entity which contains minutes, resolutions, shareholder records, details of share issues and transfers, and all other corporate records required by law to be maintained by the entity.
See Also: Minutes


Minutes
Memorandum of a transaction, proceeding, meeting, hearing or trial.


Misfeasance
The performance of an act which is legal but is improperly performed through mistake, negligence or carelessness, but without criminal intent.


Mission statement
A written statement defining the primary purpose and main objectives of an organization. The mission statement defines the reasons for the organization's existence and sets out the organization's values. Internally, it guides employees and management as to how they are expected to behave, in accordance with those objectives and values. Externally, it helps customers to find good reasons to do business with the organization.


Mistrial
An invalid trial caused by fundamental error.


Mortgage
A debt instrument, secured by the collateral of real estate, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses wishing to make large value purchases of real estate without paying the entire value of the purchase up front.


Mortgage commitment
A written indication by a lending institution that it will grant a mortgage loan on a specific property, up to a specified amount and on certain specified terms.


Mortgagee
A bank or other lender that lends money to a borrower for the purpose of purchasing a piece of real property.
See Also: Mortgagor, Mortgage


Mortgagor
An individual or company who borrows money to purchase a piece of real property. By granting the lender an interest in the property, which allows it to lend the funds with an accurate assessment of risk, the mortgagor provides the lender with a guarantee for the full repayment of the loan.
See Also: Mortgagee, Mortgage


Motion
An application made to a court which requests a ruling or order in favor of the applicant.


Murder
The unlawful killing of another person with deliberate intent to kill.


Negligence
Failure to observe the level of care and diligence which a reasonable and prudent person would use under similar circumstances.
See Also: Misfeasance


Negotiable instrument
A document guaranteeing payment of a specified sum of money on a specific date, or within a defined period of time, or on demand by the holder. Negotiable instruments include cheques, bank drafts, promissory notes, and bills of exchange.
See Also: Promissory note


Negotiation
The process of submission and consideration of offers until an acceptable arrangement is made and agreed to.


Net lease
A commercial lease arrangement under which the tenant pays for all expenses related to the property.


Net worth
The amount by which the value of a company's, or an individual's, assets exceeds the amount of their liabilities.


Next friend
A person acting, without being formally appointed, as guardian for the benefit of a minor, a person of unsound mind not judicially declared incompetent, or other person who is not able to act on their own behalf.


No contest clause
A provision in a Will that provides that any beneficiary under the Will who makes a legal challenge to the Will's validity will be disinherited.
See Also: Will


Non-circumvention clause
A provision by which each party to a contract agrees to use the other party's information only for the purposes of the business relationship between them. If the relationship is ended, neither party will make use of the other's information.


Noncompetition (non-compete) clause
A provision in a contract under which one party agrees not to run a business which competes with another party, within a certain radius of the other party's business and for a specified period of time.


Nondisclosure agreement
In contract law, a promise made by a party to a transaction, negotiation, proceeding or contract not to disclose confidential or proprietary information or trade secrets revealed by another party during the course of the negotiation, or related to the transaction or contract.


Nonfeasance
Failure to perform an act which should be performed; omission to perform a required duty, or total neglect of duty.
See Also: Misfeasance


Non-probate property
Any property, whether real or personal, which has been disposed of by some method other than by a Will, such as the proceeds of life insurance policies, retirement plans, property held in joint tenancy, or assets placed in trust.


Nonsolicitation clause
A provision in a contract by which a party agrees not to solicit a second party's customers or employees.


Notarization
The affirmation of a notary public affirming that the signature on the document being notarized is in fact the signature of the person purportedly signing the document.
See Also: Notary public


Notary public
A public officer whose function is to administer oaths, to attest and certify documents, and to take acknowledgements.
See Also: Notarization


Not-for-profit corporation
A not-for-profit (or non-profit) corporation is a corporation created by statute, government or judicial authority that is not intended to provide a profit to the owners or members. A non-profit corporation is always organized as a non-stock corporation, that is, it does not issue stock to its members.


Notice
Formal notification in writing from one party to another party or parties in a transaction, lawsuit, contract, or proceeding.


Oath
A solemn attestation that one's words are true. A promise to faithfully perform a duty or obligation (such as an official office).


Obligation
A legal duty to pay a certain amount or perform a certain action.


Occupancy
The act or fact of having or taking possession or residing in a property. The use to which a property is put.


Offer and acceptance
An offer is a proposal by one party (the offeror) to another party (the offeree) to accept the basic terms of an agreement. If the offeree agrees in writing to the proposal, this is termed an acceptance, and the agreement will then be binding on both parties.


Offering memorandum
A legal document that provides investors with the company's business plan, investment information, and a disclosure of key investment risks, required to be provided in conjunction with a private placement of the company's shares.


Officer, corporate officer
A person appointed by the directors of a corporation to a management-level position, such as President, Vice President, CEO, CFO, etc.


Option
A right granted by the owner of a property to another (the optionee), to buy certain property within a limited time at an agreed price. The optionee must exercise the option within that limited time, and often must pay an option exercise price. If the optionee fails to exercise the option, the owner can offer the property to third parties. In corporate matters, a right granted to employees, directors and other insiders to purchase stock in a company.
See Also: Stock option


Order
A written mandate, command or direction given by a court, judge or other authority having jurisdiction.


Ordinance
A rule established by an authority such as a city council, regulating certain matters such as zoning, building, safety, etc.


Pardon
A process which removes a convicted person's criminal record from police and public databases and protects the details of the record from disclosure.
See Also: Parole


Parole
Supervised release of a prisoner from imprisonment on certain prescribed conditions.


Participating mortgage
A participating mortgage is a loan that contains clauses and conditions under which the lender participates in the revenues of the property.


Partnership
A business arrangement in which two or more parties combine their resources together in one business. Compared to incorporating, forming a partnership is easy, start-up costs are relatively low, and taxes are usually lower than corporate income taxes. There are fewer regulations to operating a partnership, and the responsibility for managing the business is shared. On the downside, the liability of the partners is much higher than for corporate shareholders, and if a partner decides to leave, either the partnership dissolves or the structure and complexion of the business changes. Management authority resides in several individuals, which can result in disputes. It can also be difficult to raise additional operating capital as and when needed.


Party
A natural person, firm, corporation, organization or other entity which is involved in a legal proceeding, transaction, contract, negotiation, etc.


Party wall
A wall or partition erected on the boundary of two adjoining properties which provides support to the buildings on both sides of the boundary, such as the wall between two adjoining apartments or townhouse units. Each land owner owns the part of the party wall that is situated on his or her property, and the wall is generally subject to an easement or a grant of rights to use the wall given by each party to the other. Also known as a common wall or parting wall.


Patent
A right granted to an inventor which excludes others for a limited time from making, using or selling his/her invention in the country in which the patent is granted.


Patent pending
A statement on goods or products that means a patent has been filed with respect to the item in question, but has not yet been granted or denied.
See Also: Patent


Per capita
Literally means by the head. The means of dividing the estate of a decedent in a share-and-share-alike manner, so that each child, grandchild, greatgrandchild, etc. receives an equal share of the estate.
See Also: Per stirpes


Per stirpes
This is the most common way of distributing an estate, such that if one of the decedent's children is dead, that child's children share equally in his share of the estate distribution. For instance, if a share is left to each child of the decedent but one of the children predeceases the decedent, then his or her share would be distributed equally among any children that child had before he / she died. Also called by right of representation.
See Also: Per capita


Performance bond
A surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. If the job requires a payment and performance bond it will usually require a bid bond, to bid the job. When the job is awarded to the winning bid, a payment and performance bond will then be required as security for completion of the job.


Periodic tenancy
A tenancy that automatically renews at the end of each rental period (for example, month to month, week to week, year to year), until it is terminated by either the tenant or the landlord.
See Also: Tenancy, Lease


Perjury
The act of making a false statement under oath or in an affidavit or declaration, which is punishable by fines and/or imprisonment.


Personal directive
A personal directive is a written document that becomes effective when a person becomes mentally incapable of deciding on personal matters, such as health care, living arrangements, and/or other lifestyle choices. A personal directive appoints another person as agent to make those decisions for the individual. It may also contain instructions or directions for future care, including admittance to hospital or a care facility such as a nursing home.


Personal property
Any property other than real estate, such as vehicles, furniture, securities, jewelry, bank accounts, clothing, etc.
See Also: Chattel


Personal representative
The person who administers an estate. If the person is named in the decedent's Will, the person is often called an Executor. If there is no valid Will, the person is called an Administrator of an estate.


Plaintiff
A party who sues another party in a civil lawsuit.
See Also: Defendant


Plea
Declaration made by an accused as to whether he or she is guilty of the charges brought against him/her.
See Also: Crime, criminal


Plea bargain
An agreement reached in a criminal case between the prosecutor and the legal counsel of a person accused of a crime. Plea bargains are often used to settle the case without trial, or to secure testimony from one accused against another in exchange for a reduced sentence.
See Also: Plea


Pleadings
Collectively, the written statements of fact and law filed by the parties to a lawsuit.


Possession
Having control or custody of property for one's use and enjoyment, whether as owner or as the proprietor with a valid right to it, and either held personally or by another who exercises it in one's place and name.


Pour-over trust
A trust designed to receive property that is poured over into it. The property is usually poured over or received from a pour-over will through the probate process.
See Also: Pour-over will


Pour-over will
A Will that declares that any assets you acquire after preparing your pour-over trust will become part of that trust upon your death.
See Also: Pour-over trust


Power of attorney
A written document by which a person can authorize another person to act in his or her place, either for a particular stated purpose, or for the general transaction of business or personal affairs.


Power of sale
The right of a mortgagee to force a sale of a property without judicial proceedings, if the mortgagor defaults in payment of the mortgage.
See Also: Foreclosure


Precedent
Laws established by previous cases which must be followed in cases involving identical circumstances.


Prenuptial (or premarital) agreement
A contract between two potential marriage partners specifying how the property owned by each prior to marriage and owned individually or jointly during marriage will be divided, should the couple divorce.


Prepayment clause
A clause in a mortgage which gives the mortgagor the privilege of paying out the mortgage ahead of the maturity date, on certain terms and without penalty.


Prepayment penalty
A financial penalty assessed by a mortgage lender if the mortgage is prepaid within a certain time period. Usually calculated as a percentage of the remaining balance, or a specified number of months' interest.


Principal
In law, a person appointing an agent or attorney-in-fact, who gives the agent the authority to do certain things on his or her behalf.


Principal amount
The amount actually being advanced under a mortgage or other loan, not including any interest.
See Also: Mortgage


Principal residence
An owner-occupied home that can be sold at a profit without paying income tax.


Private placement
A private placement is a private (non-public) offering of securities to a small number of well-informed private investors. The securities do not have to be registered with a securities commission, but the offering is subject to the existing securities legislation. The securities offered for sale can include shares, warrants, debentures, etc., and the offering is usually made in connection with an offering memorandum or circular disclosing the material facts about the investment opportunity, the company, and the issuers.


Privilege
A benefit or advantage to certain persons beyond that of other person, such as an exemption, power, immunity, etc.


Pro bono
Latin phrase meaning 'for the public good'. In law, it refers to legal services provided free of charge.


Probate
The legal process which facilitates the transfer of a deceased person's property, whether or not they made a Will before they died. The court establishes the authenticity of any existing Will, appoints a personal representative or administrator, identifies heirs and creditors, directs payment of debts and taxes, and oversees distributions of the assets according to the will or state law in the absence of a will.
See Also: Probate court


Probate court
The judicial authority dedicated to handling probate matters which includes settlement of intestate and testate estates, adoptions, appointment of guardians, name changes, and other matters.


Probate Property
Any property of any kind belonging to a decedent which has been left to beneficiaries under the decedent's Will, to be distributed to those beneficiaries by the executor.


Probation
An alternative to imprisonment which allows a person found guilty of an offense to stay in the community, usual under predetermined conditions and under the supervision of an authorized officer. A violation of probation can lead to its revocation and to imprisonment.


Product liability
Legal responsibility of manufacturers and sellers to buyers, users and bystanders for damages or injuries suffered because of defective goods.


Promisee
An individual to whom a promise is made.
See Also: Promisor


Promisor
An individual who makes a promise.
See Also: Promisee


Promissory estoppel
A promise which estops the promisee from asserting or taking certain action.
See Also: Estoppel


Promissory note
An IOU issued by a borrower, whose name appears on the front of the note and who undertakes to pay the amount stated on the note to the noteholder by a certain date, with interest at a specified rate, and in accordance with the terms of the note.


Proprietor
Owner; person who has legal right or title to something.


Prorogue
To suspend proceedings of parliament. To terminate a legislative session.


Prospectus
The document that must usually be issued by a company seeking to raise money from the public. It gives details of the financial and management status of the company.
See Also: Public offering, IPO


Proving a will
The process of establishing the validity of a will before the probate court.


Proxy
An instrument authorizing another person to act on behalf of an absentee shareholder, to represent, act and vote the absentee's shares at a meeting of the shareholders of a corporation.


Public domain
Any work or intellectual property that is not subject to copyright protection and can be copied and used in any way by the general public.


Public offering
An issue of securities (shares of stock, bonds, debentures, etc) for sale to the public, in order to raise capital for the company making the offering. Public offerings are governed by federal and state, provincial, territorial laws, and require the filing of a prospectus which discloses all material facts about the investment opportunity and about the company, including a full disclosure of its financial status.
See Also: Prospectus, IPO


Punitive damages
Monetary award given to punish a defendant or wrongdoer.


Purchase and sale agreement (earnest money contract)
An agreement between a buyer and seller of property which sets out in general the price and terms of a proposed purchase and sale between the parties.


Purchase money mortgage
A mortgage granted to a buyer by the seller of a real estate property. This type of arrangement is often used in circumstances where the buyer cannot qualify for a traditional mortgage in an amount sufficient enough to cover the purchase price. As with a regular mortgage loan, the seller can foreclose if the buyer fails to make the payments. Also known as seller financing or vendor take-back.
See Also: Mortgage


Putative
Alleged; supposed; reputed.


Quitclaim (or quit claim) deed
A document that transfers a person's interest in a piece of real estate, without the warranties or guarantees that are made in a warranty deed.


Raw land
Bare land with no buildings, improvements, or infrastructure, and no grading or site development.


Real estate
Includes the land, buildings and whatever else is attached or affixed to the land.
See Also: Real property


Real property
The combination of tangible and intangible attributes of a parcel of land and improvements thereon. The value of real property is the sum of the value of the real estate (land and structures) and the value of any rights that go with the land (such as leases).


Reasonable doubt
An accused person is entitled to acquittal if, in the minds of the jury, the person's guilt has not been proven beyond a reasonable doubt; that state of mind in which jurors cannot say they feel an abiding conviction as to the truth of the charge.


Recognizance
An obligation entered into before a court whereby the recognizor acknowledges that he will do a specific act required by law.


Redemption period
The period of time during which a borrower can reclaim title to property by paying the debt secured by the property. For example, after a judicial foreclosure there is a redemption period during which the home owner can reclaim ownership of the property by paying the mortgage and interest.


Registered office
The address at which a corporation, company or other corporate body may be served with legal documents, or at which shareholders, investors and other persons can contact the corporation.


Registry
An official office in which documents are filed and other clerical functions are performed.


Release
In criminal law, to free from jail or prison. In common law, a written statement from one party (releasor) to another party (releasee) removing the releasee from any liability for loss or damage, and giving up and relinquishing the releasor's right to make a claim against the releasee.
See Also: Indemnity, Waiver


Remand
To send a dispute back to the court where it was originally heard.


Remedy
Judicial or legal means by which a right or privilege is enforced or the violation of a right or privilege is prevented, redressed or compensated.


Rent
Compensation paid by a tenant to a landlord for the temporary use and occupation of a premises.
See Also: Landlord, Tenant, Lease


Rental bond
In Australia and New Zealand, a sum of money (usually equal to 1 or 1 1/2 months' rent) which is given to the landlord by the tenant as a deposit against any damage to the rental unit, or as security for the payment of the rent.


Replevin
Legal action to recover a possession that has been wrongfully taken.
See Also: Repossession


Repossession
The taking back of an item by a creditor (the seller or lender) because the debtor (the purchaser) has not made the payments.
See Also: Replevin


Rescission
The unmaking, undoing, or repeal of a contract.
See Also: Revoke


Restitution
The act of restoring anything to its rightful owner; the act of restoring someone to an economic position he enjoyed before suffering a loss.


Restrictive covenant
In contract law, a promise given by one party to another party that they agree to be bound by certain limitations. For instance, a former employee may agree not to solicit customers of the employer for a certain length of time after leaving their employment. In real estate, a limitation placed upon the use of land, which the owner of the land agrees to be bound by.
See Also: Encumbrance


Resulting trust
A trust which arises in certain circumstances by which trust property reverts back to the original owner.


Retainer
Act of the client in employing legal counsel; also refers to the fee which the client pays when he/she retains the legal counsel to act for them.


Retirement fund
A deposit account into which regular contributions are paid, which is used to make monthly payments to the depositor after he or she has retired from working.
See Also: Annuity


Reverse takeover
An acquisition in which a private company which is not listed on a stock exchange acquires a smaller company which IS publicly listed, thus acquiring a stock market listing through the back door. This is achieved by the listed company issuing new shares in order to acquire the private company. Since the private company is larger than the listed one, the listed company has to issue so many new shares that the shareholders of the private company end up with a controlling stake in the listed company.


Revocable trust
A trust that the grantor may change or revoke in accordance with its terms.


Revoke
To cancel or nullify a legal document.
See Also: Rescission


Right
A power, privilege or entitlement vested in a party under the law or granted by virtue of a contract with another party.


Right of first refusal
A right granted to one or more parties to purchase something before the offering is made available to others. For instance, a shareholder agreement will typically include a right of first refusal clause which would require a departing shareholder to offer to sell his or her shares to the other shareholders first. If they don't want to buy them, the shares can then be offered to third parties.


Right of survivorship
A provision in a joint tenancy where the ownership interest of a joint owner will pass to the surviving co-owner upon his/her death, instead of becoming part of his/her estate.
See Also: Joint tenancy


Right of way
The right of a party to pass over the land of another party.
See Also: Encroachment


Right to die
The right to decide not to have one's life prolonged by extraordinary, artificial means.


Robbery
Unlawful taking of another's property from his or her person or immediate presence, and against his or her will, by means of force or fear.


ROI
Return on investment. When applied to a shareholder's investment in a company it is usually expressed ROIC, or return on invested capital. The ratio is expressed as a percentage. The higher the percentage the better.


Rollover
A term used to describe a transfer of property in which the person disposing of the property is not automatically taxed as though he or she received fair market value. Property disposed of in a rollover transaction is usually treated as having been transferred at a value between its cost amount and fair market value.


Rules of evidence
Standards governing whether evidence in a civil or criminal case is admissible.


Running with the land
A covenant or easement is said to run with the land when it extends beyond the original parties and binds all subsequent owners or users of the land.


Secured creditor
A lender (creditor) which has lent money to a borrower (debtor), and which has a claim in the nature of a security interest in the debtor's property, such as a mortgage over the debtor's house or a lien on the debtor's vehicle. If the debtor fails to pay the debt, the secured creditor has the right to foreclose or repossess the property. Secured creditors have priority over unsecured creditors in the case of bankruptcy and liquidation of assets.


Secured debt
A debt is secured if the debtor gave the creditor a right to repossess the property or goods used as collateral.


Securities
Documents indicating ownership, such as stock certificates and bonds.


Security deposit
A sum of money (usually equal to 1 or 1 1/2 months' rent) which is given to the landlord by the tenant as a deposit against any damage to the rental unit, or as security for the payment of the rent. Also called a damage deposit.
See Also: Rental bond


Security interest
An interest in property created by a loan agreement or other instrument, or by operation of law, to secure the performance of an obligation by the owner of the property. A security interest is usually associated with the repayment of indebtedness by a borrower to a lender, such as the granting of a mortgage to a lender by the home owner.


Seed capital
A small amount of initial startup capital contributed by the founder(s) of a business. Also referred to as startup capital.


Seizure
The taking of potential evidence in a criminal case by law enforcement officers authorized to do so by a court order. If the seizure is illegal, the evidence cannot be admitted in court.


Self-proving will
A will which has been properly witnessed and the witnesses have sworn an affidavit stating that all of the proper formalities of the will's execution have been complied with.
See Also: Proving a will


Seller financing
A real estate transaction where the seller agrees to allow the purchaser to pay all or part of the purchase price over time. This type of arrangement is often used in circumstances where the buyer cannot qualify for a traditional mortgage in an amount sufficient enough to cover the purchase price. As with a regular mortgage loan, the seller can foreclose if the buyer fails to make the payments. Also known as a purchase money mortgage or vendor take-back.
See Also: Mortgage


Sentence
The punishment ordered by a court for a defendant convicted of a crime.


Separate property
In jurisdictions with common property laws, all property which is not held commonly by a married couple is considered separate property. In general, it is property owned by one spouse in which the other spouse does not own an interest.


Service
The proper delivery of documents by delivering them to the party named in the document in a manner decreed by law.


Servient tenement
Property that is subject to use by parties other than the owner, for a specific purpose. For example, a beachfront house that has a public walkway to the beach on its premises would be a servient tenement.


Set back
A set back (or setback) is the distance from the curb or property line within which no buildings may be erected.
See Also: Easement


Settlement
An agreement between the parties in a dispute or a lawsuit.


Settlor
A person who establishes a trust, often also referred to as a Trustor or a Grantor.
See Also: Grantor, Trustor


Severability
A provision in a legal agreement which states that any article or clause of the agreement which is deemed to be unenforceable can be severed from the rest of the agreement, and the balance of the agreement will continue in full force and effect.


Share warrant
A privately issued short- or medium-term leveraged security, which gives the holder the right, but not the obligation, to buy or sell the underlying share at an agreed price known as the exercise price on or before the expiry date of the warrant.


Shareholder
Any person, company, or other institution that owns at least one share of stock in a corporation. In large public companies, shareholders are typically investors whose shares are held by a broker or trustee. In small businesses, the shareholders are usually also the directors, officers and often the employees as well. Also called a stockholder.


Shareholder loan
A loan made to a company from a shareholder, usually secured either by shares or through a debenture. Shareholder loans are generally subordinated to the company's other debts.


Simple trust
A trust that is established with terms that require the trust to pay out all of its income, so that it does not accumulate income on which income taxes would have to be paid.


Slander
Spoken defamation which tends to injure a person's reputation.
See Also: Defamation, Libel


Small Claims Court
A court that handles civil claims for small amounts of money. Parties generally represent themselves instead of hiring an attorney.


Society
A number of persons who join together for some common purpose, such as charity, sports, or a common interest. A society can either be incorporated or unincorporated.
See Also: Association


Sole proprietorship
An unincorporated business entity carried on by one individual.


Solicitor-client privilege
The confidentiality of communications between a lawyer and client with respect to the giving and receiving of legal advice.


Specific performance
A remedy requiring a party who has breached a contract to perform specifically what the party has agreed to do.


Spendthrift trust
A trust set up for the benefit of someone whom the grantor believes would be incapable of managing his/her own financial affairs.


Spousal trust
A trust established by a taxpayer for the benefit of his or her spouse.


Spouse
Legal term for a husband or wife. In many jurisdictions, the term spouse includes a same sex partner.


Springing power of attorney
A power to act on the occurrence of certain criteria, such as an illness or incompetency. The power is said to spring into existence upon the occurrence of the event. The agent's power to act for the principal under a Durable power of attorney is usually a springing power.


Sprinkling power
The power given a trustee to decide how, when and why to distribute trust income to the trust's different beneficiaries. The sprinkling power allows the trustee to "sprinkle" the trust's income over the beneficiaries. This gives the trustee the ability to distribute income to the beneficiaries who will pay the smallest amount of income tax on the distribution.


Sprinkling trust
A trust that grants the trustee a sprinkling power which allows the trustee to decide how, when and why to distribute the trust income among the trust's beneficiaries.


Statute
Legislative enactment; a law or laws enacted by a legislature.
See Also: Bill


Statute of frauds
A law which provides that certain contracts, such as real estate contracts, must be in writing in order to be enforceable.


Statute of limitations
A statute which limits the right of a plaintiff to file an action unless it is done within a specified time period after the occurrence which gives rise to the right to sue.


Statutory
Relating to a statute; created or defined by a law.


Statutory declaration
A written statement of facts which the person making it signs and solemnly declares to be true. It is affirmed by the declarant and not sworn and must be witnessed by a justice of the peace, a commissioner for declarations, a notary public, or a lawyer.

Statutory declarations are prescribed by the laws of various Commonwealth countries, including Canada, the UK, Australia, and New Zealand.
See Also: Affidavit


Stock option
A right granted by a company to key employees, directors, officers and other insiders to purchase stock in the company within a specified time period, at a price determined at the time the option is granted. The optionee must exercise the option within that time period by paying the option price and requesting the company to issue the option shares.
See Also: ESOP, Vesting period


Strata title
A form of ownership devised for multi-level apartment blocks and horizontal subdivisions with shared areas, similar to condominium or commonhold ownership. It refers to apartments being on different levels, or strata.


Subpoena
A document issued by the court that compels a person to attend legal proceedings as a witness in order to give testimony.


Summary judgment
A judgment given on the basis of pleadings, affidavits and exhibits presented for the record without any need for a trial. It is used when there is no dispute as to the facts of the case and one party is entitled to a judgment as a matter of law.


Summons
A document issued by a court, commission, or other authority requiring a person to attend a hearing or other proceeding and to produce documents or other materials.


Support trust
A trust that instructs the trustee to spend only as much income and principal as are needed for the beneficiary's support.


Surety
A person or firm (bank, insurance company, etc) which agrees to be responsible for the obligations or performance of another party. Also refers to the bond or guarantee itself.


Surety bond
A promise given by one party (the obligor) to another party (the obligee) to pay the obligee a sum of money if a third party (the principal) fails to perform its obligations under the terms of a contract or agreement, thus protecting the obligee against any losses it may suffer as a result of the principal's failure to honor its obligations.

Also called a fidelity bond or an indemnity bond.
See Also: surety, Bond company


Survey
The precise mathematical measurement of land and buildings thereon, done with the aid of surveyor's instruments.
See Also: Set back


Syndicate
An association of individuals or firms formed for the purpose of undertaking a specific duty or transacting specific business for the mutual benefit of all.
See Also: Partnership


Takeover
A change in, or transfer of, the controlling interest of a corporation from one group of shareholders to another, either through a friendly acquisition or an unfriendly or hostile bid.


Taxable income
The income against which tax rates are applied to compute tax paid; gross income of businesses or adjusted gross income of individuals less deductions and exemptions.


Tenancy
The period during which a tenant occupies land, a house, apartment, office, or the like, in exchange for payment of rent. With respect to real estate, the ownership of land by any kind of title.
See Also: Lease, Tenant, Landlord


Tenancy at will
A tenancy in which the tenant is in possession of the property for an unspecified term, such as when a buyer takes possession of a property prior to the closing of the sale transaction. The tenancy can be terminated at the will of either the landlord or the tenant without notice.


Tenancy in common
A way of owning property in which two or more owners all share ownership of the property. Tenants in common can own different percentages of the whole property, unlike joint tenants which each own 100% of the property. When one owner dies, his or her share does not automatically transfer to the other owner(s), because tenancies in common do not have a survivorship provision like joint tenancies. Instead, the deceased's share will form part of his or her estate.
See Also: Joint tenancy


Tenant
A person, company or entity that rents and occupies land, a house, an office, or the like, from a landlord for a specified period of time. Also called a lessee.
See Also: Lessee, Landord


Term
In law, the length of time for which a contract, lease, mortgage or other agreement between the parties is intended to run.
See Also: Contract


Term annuity
An annuity payable for a specified number of years.


Term insurance
A type of life insurance that is usually less expensive than other types and is renegotiated on the policy anniversary date. It becomes progressively more expensive as the individual becomes older and may become non-renewable if the individual's health deteriorates and there is no guaranteed renewal clause in the policy.


Term mortgage
A non-amortizing mortgage under which the principal amount is paid in its entirety on the maturity date, instead of being paid in installments.
See Also: Mortgage


Testamentary capacity
The legal ability to make a will, i.e. the maker is of legal age and of sound mind.


Testamentary trust
A trust that is created in a Will and does not come into existence until after the testator's death.


Testator (testatrix)
The person who makes a will - if male, a testator, and if female, a testatrix.


Testimony
The evidence given by a witness under oath. It does not include evidence from documents and other physical evidence.
See Also: Evidence


Time is of the essence
A provision in a contract which means that the specified dates and time periods in the contract are required and are therefore mandatory. Failure to act within those time periods will constitute a material breach of the contract and is grounds for cancelling the contract.


Title
Legal ownership of property.


Tort
A private or civil wrong or injury for which the court provides a remedy through an action for damages.


Trade name
The name under which a person or firm conducts its business. There is often a requirement that a trade name be registered with one or more governmental authorities who oversee the operations of businesses within their jurisdiction.


Trade secret
Confidential information concerning the commercial practices or proprietary knowledge of a business.


Trade union
A group of workers engaged in the same trade or in several related trades, who have joined together to secure the most favorable wages, hours of labor, benefits and working conditions.


Trademark
Trademark (trade mark or trade-mark) is a word, name, symbol, image or phrase used by a manufacturer to distinguish its goods from those sold by others.


Transcript
A written, word-for-word record of what was said during a trial, hearing or other proceeding.


Transfer
To convey property, assets or rights from one party to another.
See Also: Assignment


Transfer on death deed
An instrument which transfers ownership of real estate upon the owner's death to the beneficiary or beneficiaries designated in the instrument. Also called a TOD, it is used as a means of avoiding probate of the property, but estate taxes will still be payable. Only certain states allow registration of transfer on death deeds.


Treaty
A written agreement between nations for the purpose of establishing a relationship governed by international law. Also called a pact, convention, protocol, charter, declaration, modus vivendi, or understanding.


Trial
A judicial examination of issues between parties to a legal action.


Triple net lease
A commercial lease agreement under which the tenant pays for almost all expenses incurred in relation to the property, including taxes, insurance, maintenance, repairs and improvements.


Trust
An arrangement between parties where one party holds property on behalf of or for the benefit of another party, as trustee.


Trust agreement or declaration
A legal document that sets up a living trust. Testamentary trusts are set up in a will.


Trustee
The person or institution that manages the property put in trust.
See Also: Trustor, Trust


Trustor
A person who establishes a trust, often also referred to as a Grantor or a Settlor.
See Also: Settlor, Grantor


Truth in lending
Statutes which provide that precise and meaningful cost of credit information be provided to the credit customer.


Unilateral contract
An agreement by which one party undertakes express performance without receiving any express promise of performance from the other party.


Union
An organization of workers formed for the purpose of collective bargaining.


Unlawful detainer
A detention of real estate without the consent of the owner or other person entitled to its possession. An unlawful detainer lawsuit is most commonly called an eviction.
See Also: Eviction


Unsecured debt
Debts such as credit accounts with suppliers, for which the debtor has not pledged collateral to guarantee payment.


Usury
Charging interest on a loan above the maximum rate permitted by statute.


Vacate
To set aside a judgment; to move out of a premises.


Valuation
Estimated worth or price. The act of determining how much a specific property or asset is worth.
See Also: Market value


Variation
A change to a court order or other legal document, made on the authority of a court.


Vendor
The seller under a purchase and sale agreement.


Vendor take-back mortgage
A means of financing a real estate transaction where the seller (vendor) agrees to allow the purchaser to pay all or part of the purchase price over time. This type of arrangement is often used in circumstances where the buyer cannot qualify for a traditional mortgage in an amount sufficient enough to cover the purchase price. The vendor has the right to foreclose the property if the buyer fails to make the payments. Also known as a purchase money mortgage or seller financing.
See Also: Mortgage


Venue
Authority of a court to hear a matter based on geographical location. Also referred to as jurisdiction.


Verdict
A conclusion as to fact or law that forms the basis for the court's judgment in a legal matter.


Vest indefeasibly
A property vests indefeasibly if the person acquiring it obtains a right to absolute ownership in such a manner that the right cannot be taken away by any future event.


Vesting period
A future time at which a grant of stock options may be cashed in for actual stock. For instance, if the company grants 3,000 stock options to an employee over a 3-year vesting period, the employee can purchase 1,000 shares of stock over each of the next 3 years.
See Also: Stock option


Victim impact statement
A statement prepared by a victim of a crime and read in court at the sentencing of the perpetrator, describing the impact that the crime has had on their life.
See Also: Crime, criminal


Visa
An official endorsement on a passport or document indicating that the bearer may proceed.


Void
Invalid; a void agreement is one for which there is no remedy.


Voidable
Capable of being declared invalid; a voidable contract is one in which a party may avoid his obligation, as a contract between an adult and a minor.


Voir dire
A preliminary examination made by a court of a witness or juror to determine his/her competency or interest in a matter. Literally, it means to speak the truth.


Voluntary bankruptcy
A proceeding by which a debtor voluntarily asks for a discharge of his/her debts.
See Also: Bankruptcy


Voting trust
A trust set up to separate the right to vote from the other rights attached to certain shares. Shareholders appoint a trustee, transfer legal title for their shares to the trustee, and give the trustee the power to vote the shares in accordance with the provisions of a trust agreement among the parties. The shareholders continue to be beneficial owners of the shares.


Waiver
An intentional giving up of a right, such as the right to sue for damages. A waiver of liability is often coupled with a release of the other party.
See Also: Release, Indemnity


Warrant
A court order authorizing law enforcement officers to make an arrest or conduct a search.


Warranty
A promise that a proposition of fact is true.


Warranty deed
A deed which guarantees that the title conveyed is good and its transfer is legal.


White collar crime
A term generally referring to fraudulent or dishonest business schemes, such as embezzlement, consumer fraud, ponzi schemes, insider trading, and similar crimes.


Will
A document, usually type-written, setting out an individual's wishes regarding the disposition of assets after his or her death, signed by the individual and at least two witnesses in the presence of each other.
See Also: Codicil


Winding up
The process of settling the accounts and liquidating the assets of a corporation for the purpose of distributing the net assets to shareholders and dissolving the corporation.
See Also: Liquidation


With prejudice
A declaration which dismisses all rights. A judgment barring the right to bring or maintain an action on the same claim or cause.


Without prejudice
A declaration that no rights or privileges of the party concerned are waived or lost. In a dismissal, these words maintain the right to bring a subsequent suit on the same claim.


Witness
One who personally sees or perceives a thing, and testifies as to what he/she has seen, heard or observed. A person who watches a person sign a legal document and then attests to having witnessed the signing.


Worker's compensation
Employer-funded insurance that provides compensation to employees and their families for work-related injury or death.


Wraparound mortgage
A financing option for a real estate purchase by which the seller loans part of the purchase money to the buyer. The buyer agrees to pay the remaining balance on the seller's original mortgage plus the additional loan amount from the seller. Also called a "wrap".
See Also: Mortgage


Writ
A judicial order directing a person to do something.
See Also: Court order


Writ of attachment
A court order directing a law enforcement officer to seize property belonging to a defendant in order to satisfy a judgment against that defendant.


Writ of execution
A court order evidencing debt of one party to another and commanding the court officer to take property in satisfaction of the debt.


Writ of garnishment
A court order whereby property, money or credits in the possession of another person may be seized and applied to pay a debtor's debt (such as garnishment of the wages to be paid to the debtor by his/her employer).


Writ of habeus corpus
A mandate from a judge requiring a prisoner to be brought before the court to determine whether the government has the legal right to hold or continue to hold them in custody.
See Also: Habeus corpus


Zoning by-law
A by-law passed by a municipality prohibiting the use of land in certain areas for any purpose other than as set out in the by-law. Zoning by-laws typically designate certain areas as residential, others as business, and some for combined uses.