Legal terms glossary.
Arbitration
A method of alternative dispute resolution in which an impartial third party, known as an arbitrator, hears both sides of a dispute and renders a decision, which is usually binding on both parties.
Example: Two businesses cannot resolve a contract dispute on their own and decide to go to arbitration to reach a final decision.
Further reading: https://www.americanbar.org/groups/gpsolo/publications/gp_solo/2020/may-june/arbitration-agreements-limits-class-actions/
Breach of Contract
A violation of one or more of the terms or conditions of a legally binding agreement.
Example: A vendor fails to deliver goods on the agreed date, causing losses for the buyer.
Further reading: https://www.law.cornell.edu/wex/breach_of_contract
Class Action
A lawsuit brought by one or more individuals on behalf of a larger group, or class, of people who have the same or similar legal claims.
Example: A group of consumers files a class-action lawsuit against a company for selling defective electronic devices.
Further reading: https://www.americanbar.org/groups/litigation/committees/class-actions/
Contingency Fee
A fee arrangement in which an attorney's compensation is dependent on winning the client's case and is based on a percentage of the monetary amount awarded.
Example: A personal injury attorney agrees to represent a client on a contingent fee basis, receiving 30% of any settlement or judgment.
Further reading: https://www.caoc.org/?pg=contingencyfees#:~:text=In%20a%20typical%20contingency%20fee,cost%20of%20pursuing%20a%20trial.
Damages
Monetary compensation that is awarded to a party in a civil case when they have suffered loss or injury due to the wrongful conduct of another party.
Example: In a personal injury lawsuit, the injured party may seek damages for medical expenses, lost wages, and pain and suffering.
Further reading: https://www.law.cornell.edu/wex/damages
Due Diligence
The process of investigating and gathering information about a business, individual, or transaction to make an informed decision and mitigate risk.
Example: A company conducts due diligence before acquiring another company to ensure there are no hidden liabilities or legal issues.
Further reading: https://internationalsales.lexisnexis.com/glossary/compliance/what-is-due-diligence
Eminent Domain
The power of a government or its agent to take private property for public use, with payment of just compensation.
Example: The local government exercises its power of eminent domain to acquire land for the construction of a new highway.
Further reading: https://www.law.cornell.edu/wex/eminent_domain
Extradition
The process of transferring a person from one jurisdiction to another for the purpose of criminal prosecution or serving a sentence.
Example: A foreign government requests the extradition of a suspected criminal who is captured in another country.
Further reading: https://www.law.cornell.edu/wex/extradition
Fiduciary Duty
A legal obligation of one party to act in the best interests of another party, typically arising from a relationship of trust or confidence.
Example: A trustee has a fiduciary duty to manage the assets of a trust for the benefit of the beneficiaries.
Further reading: https://www.unpri.org/policy/fiduciary-duty
Garnishment
A legal process in which a portion of a person's earnings, property, or bank account is withheld to satisfy a debt.
Example: An employee has a portion of their wages garnished to pay a creditor for an outstanding debt.
Further reading: https://www.law.cornell.edu/wex/garnishment
Habeas Corpus
A legal writ used to challenge the legality of a person's detention or imprisonment.
Example: A defendant files a petition for a writ of habeas corpus claiming that they are being held in jail unlawfully.
Further reading: https://www.britannica.com/topic/habeas-corpus
Injunction
A court order that requires a party to do something or refrain from doing something.
Example: A judge grants a temporary injunction preventing a business from using a trademark that is similar to its competitor's.
Further reading: https://www.law.cornell.edu/wex/injunction
Joint Venture
A business arrangement in which two or more parties join together to carry out a specific project or undertaking.
Example: Two companies form a joint venture to develop and market a new product.
Further reading: https://www.investopedia.com/terms/j/jointventure.asp
Mediation
An alternative dispute resolution process in which an impartial third party, known as a mediator, facilitates communication between disputing parties to help them reach a mutually satisfactory agreement.
Example: Two neighbors participate in mediation to resolve a property boundary dispute.
Further reading: https://www.americanbar.org/groups/dispute_resolution/resources/disputeresolutionprocesses/mediation/
Negligence
The failure to exercise the care that a reasonable person would use under the same circumstances, resulting in harm to another person or their property.
Example: A driver is found negligent for causing an accident by texting while driving.
Further reading: https://www.law.cornell.edu/wex/negligence
Precedent
A legal principle or decision made by a court that establishes a rule to be followed in future cases with similar issues or facts.
Example: The landmark case of Roe v. Wade set a precedent for abortion rights in the United States.
Further reading: https://www.law.cornell.edu/wex/precedent
Power of Attorney
A legal document that grants one person the authority to act on behalf of another person in specified matters.
Example: An elderly individual appoints their adult child as their agent through a durable power of attorney for managing their financial matters.
Further reading: https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/power_of_attorney/
Res Ipsa Loquitur
A legal principle that allows a court to infer negligence on the part of a defendant when the injury-causing events would not normally occur without negligence.
Example: A surgical instrument is left inside a patient after surgery, implying negligence on the part of the medical staff.
Further reading: https://www.law.cornell.edu/wex/res_ipsa_loquitur
Statute of Limitations
A law that sets a time limit for pursuing legal action in certain types of cases, starting from the date of the alleged event or discovery of the event.
Example: A personal injury claim must be filed within two years after the date of the accident, according to the state's statute of limitations.
Further reading: https://www.investopedia.com/terms/s/statute-of-limitations.asp
Small Claims Court
A court with simplified procedures and limited jurisdiction to hear civil cases involving relatively small amounts of money in dispute, usually without the need for attorneys.
Example: A landlord and tenant resolve a dispute over a security deposit in small claims court.
Further reading: https://www.law.cornell.edu/wex/small_claims_court
Tort
A civil wrong that causes harm to another person, for which the injured party may seek compensation.
Example: In a defamation case, the plaintiff claims that the defendant's false statements have resulted in harm to their reputation.
Further reading: https://www.law.cornell.edu/wex/tort
Usury
The practice of charging an excessive or illegally high rate of interest on a loan.
Example: A lender is charged with usury for charging a 40% interest rate on a personal loan, which exceeds the state's maximum allowed rate.
Further reading: https://www.law.cornell.edu/wex/usury
Vicarious Liability
A legal principle that holds one person or entity responsible for the wrongful acts of another, due to their relationship or control over that person.
Example: An employer may be held vicariously liable for the actions of their employee that occurred during the course of their employment.
Further reading: https://dictionary.law.com/Default.aspx?selected=2223#:~:text=vicarious%20liability,negligence%20lawsuit%20or%20criminal%20prosecution.
Will
A legal document in which a person specifies how their property should be distributed upon their death.
Example: An individual writes a will to ensure their family members inherit their estate according to their wishes.
Further reading: https://www.fidelity.com/life-events/estate-planning/will
Zoning
The regulation of the use and development of land by local governments, typically divided into districts for specific purposes, such as residential, commercial, or industrial.
Example: A homeowner seeks a zoning variance from the city to build an addition to their house that encroaches on the required setbacks.
Further reading: https://www.americanbar.org/groups/state_local_government/publications/state_local_law_news/2016-17/spring/introductizoning-and-land-use/
Mens Rea
A Latin term meaning "guilty mind," referring to the mental element required to establish guilt in a criminal offense.
Example: The prosecution must prove that the defendant had the necessary mens rea, or intent, to commit the crime.
Further reading: https://www.law.cornell.edu/wex/mens_rea
Pro Bono
Legal services provided by attorneys without charge, usually to low-income clients or nonprofit organizations.
Example: A law firm provides pro bono legal representation to a homeless shelter facing eviction.
Further reading: https://www.law.georgetown.edu/experiential-learning/pro-bono-community-service/what-is-pro-bono/
Subrogation
The process by which an insurance company, after paying a claim, seeks reimbursement from the party responsible for the loss or damages.
Example: An insurer pays its insured for damages caused by a third-party's negligence and then seeks subrogation from the negligent party or their insurer.
Further reading: https://www.law.cornell.edu/wex/subrogation
Indemnification
A contractual obligation of one party to compensate another party for losses or damages that arise from a specified event or circumstance.
Example: A contractor agrees to indemnify the property owner for any damages caused during the course of construction.
Further reading: https://legal.thomsonreuters.com/en/insights/articles/indemnification-clauses-in-commercial-contracts
Discovery
The pretrial process in which parties to a lawsuit obtain information and evidence from each other in order to prepare their case.
Example: During discovery, both parties exchange written interrogatories and conduct depositions of witnesses to gather facts for their case.
Further reading: https://www.law.cornell.edu/wex/discovery