Legal Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #

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Abandonment: The act of a trustee relinquishing possession and control of property out of the estate and giving it back to the debtor.

Absolute priority rule: In a Chapter 11 case, the rule that no junior class of claims or interests may receive anything of value from the estate unless a more senior non-accepting class of unsecured claims or interests is paid in full.

Abstract of title: A summary of all conveyances, transfers, and other facts (of record) as evidence of title or that which would impair title of real property.

Accepted claim: A claim in which the insurance company accepts that your injury or illness will be covered by workers' compensation.

Accident: An occurrence in a sequence of events that produces unintended injury, death, or property damage. Accident refers to the event, not the result of the event

Accident Cause: The last occurrence in a sequence of events which directly contributed to or produced an accident or incident.

Accident Costs: The monetary losses associated with an accident or incident. These costs include direct and indirect costs.

Accident Investigation: A detailed, defined, and recorded review of an occurrence, done to uncover and record the factors and causes and their relationships which led up to and caused an accident or incident.

Accident Prevention: The application of measures designed to reduce accidents or accident potential within a system, organization or activity. An accident prevention program is one which aims to avoid injury to personnel and/or damage to property.

Accident Records: Recorded information in the form of reports and records detailing what accidents or incidents have occurred in a company or industry and what losses and injuries resulted.

Accident Report: A document containing the information and facts about an individual accident or incident put in chronological order to present a complete picture as to what happened. May also be used as a tool to help establish the ROOT cause.

Accountant: A person authorized under applicable law to practice public accounting.

Acquisition: The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets.

Action or civil action:  An adversary proceeding or a contested petition or proceedings to vacate an order for relief or to determine any other contested matter.

Adequate protection: Security, collateral or some other measure undertaken or provided by the debtor in bankruptcy, to protect a claim holder from depreciation of its collateral pending confirmation of a plan, for the period during which the debtor has continued possession or use of the collateral.

Adjustable rate mortgage: Any real estate loan in which the interest rate varies over time according to a prescribed formula or set of conditions, usually changes in economic conditions. (Also known as a variable rate mortgage).

Addendum: An addition or change to a contract.

Administrative dissolution: The involuntary dissolution of a corporation by the Secretary of State, or other equivalent department, due to the failure of a corporation to meet statutory requirements such as periodic filing and tax reporting requirements.

Administrative expenses: Actual and necessary costs and expenses involved in preserving an estate, including wages, salaries, or commissions for services rendered.

Ad valorem tax: Tax based on assessed property value.

Adversary matter: A dispute in a bankruptcy proceeding that may be adjudicated by means of an adversary proceeding (lawsuit) filed in bankruptcy court.

Adverse possession: The acquisition of title to property through possession without the owner's consent for a certain period of time.

Advisory board: A body that advises the board of directors and management of a corporation but does not have authority to vote on corporate matters.

Affidavit: A written statement under oath.

Age Discrimination in Employment Act: A federal law that protects older employees from employment discrimination on the basis of age.

Agency: The relationship of trust that exists between sellers and buyers and their agents. The agency is usually formed through a written contract.

Agency Disclosure: Laws in most states require agents who act for buyers or sellers to disclose who represents whom in a real estate transaction. Laws vary widely by state but in Texas it is required at the first meeting when substantive matters about real estate are discussed.

Agent for service of process: The person or entity that is authorized to receive legal papers on behalf of a corporation.

Agreement: Mutual assent between two or more parties; normally leads to a contract; may be verbal or written.

Allocated interests: The common expense liability and votes in the association allocated to each lot or unit, as well as the undivided interest in the common elements allocated by the declaration to each unit within a condominium.

Allowance for Repairs: An amount negotiated within a contract that the seller agrees to pay toward buyer designated repairs.

Allowed claim: A claim or debt deemed allowed in a bankruptcy case

Alter ego: Corporation used by an individual to conduct personal business. It's illegal. In alter ego scenario, individuals will be held liable to the corporation. See also piercing the corporate veil.

Alter ego liability: Doctrine that attaches liability to corporate shareholders in cases of commingling of assets and failure to observe corporate formalities.

Amendment of Articles of Incorporation: The procedure by which one or more changes is made to a corporation's articles of incorporation.

Americans with Disabilities Act: A federal law that protects employees from discrimination on the basis of disability, and imposes upon employers the requirement that they make "reasonable accommodations" for their employees' disabilities.

Amortization: The process of paying the principal and interest on a loan through regularly scheduled installments. Initially, most of each payment is applied toward interest owed, and later in the loan term increasingly applied toward principal.

Amortization schedule: Schedule showing principal and interest payments throughout the life of the loan.

Annual meeting: Yearly meeting of shareholders in corporate law context for the purpose of electing shareholders.

Annual meeting of directors: A meeting held each year to elect officers of a corporation, and to address other corporate matters. Usually follows immediately after an Annual Meeting of Shareholders.

Annual meeting of shareholders: A meeting held each year to elect directors of a corporation, and to address other corporate matters.

Annual percentage rate (APR): A measure of interest rate that expresses the cost of a mortgage as a yearly rate on the loan balance. The APR assumes the loan is held for its full term. For adjustable-rate loans, the APR assumes the loan's index doesn't change from its initial value.

Answer: Pleading filed by the defendant that responds to a complaint, petition, or motion.

Antecedent debt: A debt that is accrued or acquired prior to the debtor making a payment to the creditor on account of the debts

Anti-alienation clause: A term or provision of a trust that forbids transfer of the debtor's beneficial interest in the trust to another.

Appeal: A request to the higher court for review of the lower court's decision and to request a reversal of the judgment.  In disability cases, it is the process to change the decision of the Social Security department when a decision is made that affects your benefits. 

Apportionment: The allocation of income earned from activities in a particular state or assets present in a particular state to determine the tax due in that state.

Appraisal: An opinion or statement (written or oral) of the value of the property.

Appraisal fee: Charged by an appraiser to give an opinion or statement (written or oral) of the value of property.

Arbitration: The procedure by which a dispute may be resolved by a person who is not a judge. Arbitration is often used to limit legal costs to both parties.

Arbitrator: A person who conducts an arbitration.

Articles of Incorporation: The document which gives birth to a corporation by filing in the state of incorporation. Articles cover foundational matters such as the name of the corporation, the shares it is authorized to issue, its corporate purpose, and its agent for service of process.

Assessed value: Value of property for taxation purposes as determined by the tax assessor.

Assessments:  Monetary obligations levied by an association which are payable by owner in a condominium or planned community.

Assignment: A transfer of a right or property and duties in connection with a contract, to another.

Association or owners association: The association organized as allowed under North Carolina law, including G.S. 47C-3-101 or G.S. 47F-3-101, to administer a condominium or planned community.  Also called a homeowners association.

Assumption: A debtor or the estate may assume or reject a lease or executory contract; the act of continuing to be responsible for the lease or contract.

Assumption of loan, mortgage or deed of trust: An agreement wherein the buyer assumes or takes responsibility (becomes liable) for payment of an existing note secured by a mortgage or deed of trust.

Assumption of risk: A doctrine that states if the plaintiff has knowingly accepted the danger of doing something, recovery from the defendant in an action brought for negligence will be barred.

Assumption transfer fee: Charged by existing mortgage company to process existing loan.

At will employment: A type of employment relationship in which there is no contractual agreement and either party may end the employment relationship at any time, for any reason or for no reason at all, without incurring a penalty.

Attorney document preparation fee: Charged by attorney for preparing legal documents for the transaction.

Audit: An examination by a trained accountant of the financial records of a business or governmental entity, including noting improper or careless practices, recommendations for improvements, and a balancing of the books.

Auditor: An accountant who conducts an audit to verify the accuracy of the financial records and accounting practices of a business or government. A proper audit will point out deficiencies in accounting and other financial operations.

Authorized capital: The total number of a corporation's authorized shares multiplied by the share's par value.

Authorized shares: The number of shares of a corporation's stock that the corporation has the authority to issue. The authorized shares of a class of stocks is stated in a corporation's articles of incorporation.

Avoidance of lien: The act of obtaining a release from the effect of a lien, judgment or security interest in property, typically in connection with exempt property but also on any grounds provided by the Bankruptcy Code.