- Legal Dictionary
Understand key legal terms and phrases used in contracts and compliance.
Arbitration
Dispute Resolution
A dispute resolution process where a neutral third party makes a binding decision.
Example: Many contracts require arbitration instead of court litigation.
At-Will Employment
Employment Law
Employment that can be terminated by either party at any time, with or without cause.
Example: Most U.S. states follow at-will employment, but some exceptions apply.
Breach of Contract
Contract Terms
Failure to perform any term of a contract without a legitimate legal excuse.
Example: Not delivering goods by the agreed deadline constitutes a breach of contract.
Consideration
Contract Terms
Something of value exchanged between parties to make a contract legally binding.
Example: Money, goods, services, or promises can serve as consideration.
Due Diligence
Trending
Business Law
A comprehensive investigation or audit of a business or investment opportunity.
Example: Buyers conduct due diligence before acquiring a company to assess risks.
Easement
Real Estate
A legal right to use another person’s property for a specific purpose.
Example: A utility company may have an easement to run power lines across private land.
Escrow
Real Estate
A financial arrangement where a third party holds funds or documents until specific conditions are met.
Example: Buyer’s deposit is held in escrow until the home sale is completed.
Force Majeure
Trending
Contract Terms
Unforeseeable circumstances that prevent a party from fulfilling a contract.
Example: Natural disasters, wars, or pandemics may trigger force majeure clauses.
Indemnification
Dispute Resolution
A contractual obligation where one party agrees to compensate another for certain damages or losses.
Example: A vendor may indemnify a client against third-party lawsuits.
Intellectual Property
Intellectual Property
Creations of the mind, such as inventions, artistic works, and symbols, protected by law.
Example: Patents, trademarks, and copyrights are types of intellectual property.
Liability
Business Law
Legal responsibility for damages, debts, or obligations resulting from one’s actions or omissions.
Example: A company may face liability for defective products that cause injuries.
Liquidated Damages
Contract Terms
A predetermined amount of money specified in a contract to be paid if certain breaches occur.
Example: A $1,000 penalty for each day a project is delayed beyond the deadline.
Mediation
Dispute Resolution
A voluntary dispute resolution process where a neutral facilitator helps parties reach agreement.
Example: Divorcing couples often use mediation to resolve custody and property issues.
Non-Compete Clause
Trending
Employment Law
A contract provision that prevents an employee from working for competitors for a specified period.
Example: A software engineer may be restricted from joining competitors for 12 months.
Non-Disclosure Agreement (NDA)
New
Intellectual Property
A legal contract that prevents parties from sharing confidential information with third parties.
Example: Employees often sign NDAs to protect company trade secrets.
Power of Attorney
Legal Documents
A legal document authorizing someone to act on another person’s behalf in legal or financial matters.
Example: A durable power of attorney remains valid even if the principal becomes incapacitated.
Severance Package
Employment Law
Compensation and benefits provided to employees when their employment is terminated.
Example: Two weeks of pay plus health insurance continuation for three months.
Statute of Limitations
Legal Procedures
A law that sets the maximum time period for initiating legal proceedings.
Example: Personal injury claims typically must be filed within 2-3 years of the incident.
Title Insurance
Real Estate
Insurance that protects property buyers and lenders against financial loss from title defects.
Example: Title insurance covers issues like undisclosed liens or ownership disputes.
Trade Secret
Intellectual Property
Confidential business information that provides a competitive advantage.
Example: Coca-Cola’s formula is one of the world’s most famous trade secrets.