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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Par value: The issued price of a security that bears no relation to the market price.

Parent corporation: A corporation that either owns outright or controls a subsidiary.

Participate: To invest and then receive a part or share, as in business profits, payments on a promissory note, title to land, or as one of the beneficiaries of the estate of a person who has died.

Partner: One of the co-owners and investors in a "partnership" which is an ongoing business enterprise entered into for profit.

Partnership: A business enterprise entered into for profit which is owned by more than one person, each of whom is a "partner." A partnership may be created by a formal written agreement, but may be based on an oral agreement or just a handshake; coming together to operate a business for profit. Partnerships do not enjoy limited liability, except in the case of limited partnerships.

Party-in-interest: May includes the debtor, the trustee, a creditors' committee, an equity security holders' committee, a creditor, an equity security holder, or any indenture trustee.

Patent ambiguity: An obvious inconsistency in the language of a written document.

Pay-off penalty: Charged by lender for premature payment of conventional loan balance.

Penalty: An amount of money you receive because something wasn't done correctly in your claim.

Peremptory challenge: A challenge to a particular juror that requires no reason. Normally an attorney has a limited number of these challenges.

Permanent disability: Any lasting disability that results in a reduced earning capacity after maximum medical improvement is reached.

Permanent disability advance: A voluntary lump sum payment of permanent disability you are entitled to in the future.

Permanent disability benefits: Payments you receive when your work injury permanently limits the kinds of work you can do or your ability to earn a living.

Permanent disability payments: A mandatory bi-weekly payment based on the portion of permanent disability received before and/or after an award is issued.

Permanent disability rating: A percentage that estimates how much a job injury permanently limits the kinds of work you can do. It is based on your medical condition, date of injury, age when injured, occupation when injured, how much of the disability is caused by your job, and your diminished future earning capacity. It determines the number of weeks you are entitled to permanent disability benefits.

Permanent injunction: Extinguishing the debtor's personal liability on dischargeable debts, through the granting of a permanent injunction protecting the debtor from efforts to collect such debts as a personal liability.

Permanent partial disability benefits: Payments you receive when your work injury partially limits the kinds of work you can do or your ability to earn a living.

Permanent total disability benefits: Payments you receive when you are considered permanently unable to earn a living.

Person:   A natural person, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity.

Personal property: Defined by the law as "things movable." This is distinguished from the term "real property," which includes things such as trees, buildings and land.

Pest-control inspection: A common pest-control inspection is a termite inspection, which is required in some states, such as California.

Petition: A formal request that the court take some action; a complaint.

Pierce the veil: Doctrine that attaches liability to corporate shareholders in cases of commingling of assets and failure to observe corporate formalities.

Photo fees: Charged by lender for photographing property.

PITI (principal, interest, taxes, and insurance): A payment amount calculated by the lender to include the principal, interest, taxes, and insurance on an amortizing loan. The figure is designed to represent the borrower's actual monthly mortgage-related expenses.

Plaintiff: The party bringing the case against another.

Plan: A detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

Planned community:  Real estate with respect to which any person, by virtue of that person's ownership of a lot, is expressly obligated by a declaration to pay real property taxes, insurance premiums, or other expenses to maintain, improve, or benefit other lots or other real estate described in the declaration.  Neither a cooperative nor a condominium is a planned community. 

Planned unit development (PUD): A highly designed residential project that features relatively dense clusters of houses, which are usually surrounded by areas of commonly owned open space maintained by a nonprofit community association.

Plat book: A public record containing maps showing the division of streets, blocks, and lots, and indicating the measurements of the individual parcels.

Pleading: A pleading is the process of making formal, written statements by the litigants. All papers filed with the court are collectively referred to as "pleadings."

Policy of title insurance: A contract indemnifying against loss resulting from a defect in title or outstanding liens on the real property insured.

Point: An amount equal to 1 percent of the loan amount. Points may be paid by the borrower at the time the loan is made to get a lower interest rate. Lenders offer various rate/point combinations.

Power of attorney: A document authorizing a person (the attorney-in-fact) to act on behalf of another (the principal); to be directive in real estate, the power of attorney must be recorded.

Precedent: The value that a completed case has on deciding future cases.

Preemptive right: The right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder.

Preferential lien: A lien obtained under circumstances which make it a preferential payment or transfer and subject to being avoided.

Preferred stock: A separate and/or secondary class of stock issued by some corporations. Preferred stock typically has limited or no voting rights, but its holders are paid dividends or receive repayment priority in the event the corporation is liquidated.

Prepackaged bankruptcy: Before filing a bankruptcy case debtor and creditors may have negotiated an agreed upon plan of reorganization. The bankruptcy petition can then be filed and the plan confirmed with much less time and expense.

Pre-approval: A thorough assessment made by a lender of a potential borrower's ability to pay for a home, and a confirmation of the amount to be borrowed. The completion of a loan application is necessary to close the loan.

Prepaid expenses: Expenses including taxes, insurance, and assessments that are paid before the due date.

Prepaid fees: Funds collected by the lender from the borrower to pay certain recurring items in advance, including interest, property taxes, hazard insurance, and, if applicable, private mortgage insurance (PMI).

Prepaid interest: Interest paid before it is due. For example, at the close of a real estate transaction the borrower may prepay interest that will accrue between closing and the first monthly payment.

Pre-payment penalty: A provision inserted in a note whereby a penalty is to be paid by the borrower in the event the note is paid off before the due date.

Prequalification: A lender's preliminary assessment of a buyer's ability to pay for a home, and an estimate of how much the buyer may borrow.

Present value: The present value of a future amount adjusted to account for inflation.

Prime lending rate: The minimum short-term interest rate charged by commercial banks to their most creditworthy clients. Home loan rates typically are several points above the prime rate, which is also used as the basis for mortgages, business loans, and personal loans.

Principal: One who has permitted or directed another to act for his or her benefit and subject to his or her direction or control.

Principal place of business: Location for the head office of a business where the books and records are kept and/or management works. In most states corporations must report their principal place of business to the Secretary of State.

Priority: The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all the claims in full.

Processing fee: May be charged by a lender to initiate a loan.

Product liability: A type of strict liability in which the manufacturer or seller is strictly liable for injuries caused by defective products.

Professional association or corporation: A corporation whose members are all licensed professionals, such as doctors, lawyers, accountants and architects.

Property line: The official dividing line between properties.

Promoter: A person who puts together a business, particularly a corporation, including the financing. Usually the promoter is the principal shareholder or one of the management team and has a contract with the incorporators or makes a claim for shares of stock.

Proof of claim: The official form prescribed by the Bankruptcy Rules by which a creditor files his claim or evidence of debt in a bankruptcy case.

Property of the estate: The commencement of a bankruptcy case creates an "estate." The estate technically becomes the temporary legal owner of all of the debtor's property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate.

Property value: The value of a piece of property, based on the price a buyer will pay at a given time.

Prorate: To allocate percentages of certain expenses to be paid by the buyer and seller at the time of closing.

Pro se: On one's own behalf; not using an attorney.

Proxy: An authorization by one shareholder giving another person the right to vote the shareholder's shares. Proxy also refers to the document granting such authority.

Public benefit corporation: A term used in some states for a nonprofit community service corporation. Typical examples are clubs like Kiwanis, Rotary, and Lions.

Public corporation: A corporation created to perform a governmental function or to operate under government control, such as a municipal water company or hospital.

Puffing: Puffing is the exaggeration of the good points of a product, business, or real property. Puffing may also include the exaggeration of the prospects for future rise in value, profits and growth.

Punch list: A list compiled by a buyer prior to a sale detailing items to be fixed before closing.

Punitive damages: Damages given for the purpose of punishing the defendant.

Purchase contract: A legal document that binds a buyer to purchase a piece of property for a set price, and also binds the seller to sell that property to the buyer.

Purchase money security interest: A security interest in property, to the extent that it secures credit given to the debtor for the purpose of acquiring the property and actually used by the debtor for that purpose.

Purchase Offer: A written document used to secure a firm offer to purchase property and provide a receipt for the buyer's earnest money. (Also known as a purchase agreement or deposit).

Purchaser:  Any person, other than a declarant or a person in the business of selling real estate for the purchaser's own account, who by means of a voluntary transfer acquires a legal or equitable interest in a lot, other than (i) a leasehold interest (including renewal options) of less than 20 years, or (ii) as security for an obligation.