The Law Dictionary for Everyone
Earnest money is a term used to refer to an amount of money given by a buyer to a seller to demonstrate the buyer’s good faith in the transaction. Most commonly used in real estate transactions, earnest money may be used to allow the buyer more time to seek financing, or come up with the rest of the money. Unlike […]
Read moreA document that contains a guarantee or promise to pay a specific amount of money to a person or entity in possession of the instrument, whether on a specified date or on demand, is known as a “negotiable instrument.” A negotiable instrument features the name of the person who is to make payment. Examples include checks, banknotes, and promissory notes. […]
Read moreThe act of altering a document by adding, substituting, or subtracting some part of it is to “amend” the document. Documents that are commonly amended include legislative bills, pleadings, contracts, and the U.S. Constitution. When the change takes place, it may be referred to as an “amendment.” In order to amend laws, statutes, the Constitution, and other political or social […]
Read moreMutual assent is an agreement between two parties that intend to form a contract. Also known as a “meeting of the minds,” mutual assent signifies that the parties agree to the terms they are setting, as long as the necessary requirements are in place. Such a consensus is the first step in the contractual process. To explore this concept, consider […]
Read moreA term used in contract law, a “covenant not to compete” is an agreement in which an individual, usually an employee, agrees not to work for the other party’s competition in a specified geographical area for a specified length of time. Also referred to as a “non-compete clause,” or “non-compete agreement,” this type of legal agreement is commonly used in […]
Read moreA distributor is one who buys products from a supplier, warehouses them, then sells them to retailers or to end-use customers. A distributorship agreement is a contract made between an individual or entity (the “distributor”) and the supplier, setting out the terms under which the distributor may sell the products. Products are purchased from the supplier at a low cost, […]
Read moreA French term that literally means a superior or irresistible power, “force majeur” is used in the legal system to refer to natural and unavoidable catastrophes that interrupt the expected course of events. Force majeure clauses are often found in contracts and insurance policies to protect the parties in the event duties cannot be performed due to causes outside the […]
Read moreA Power of Attorney document allows an individual (the “principal”) to appoint someone to act as an agent on his behalf. The agent, called an “attorney-in-fact,” though the agent need not be an attorney, can take care of important matters for the individual, such as managing finances, selling property, paying bills, or authorizing medical care. A general Power of Attorney […]
Read moreIncidental damages are reasonable expenses incurred by one party to a contract as a result of the other party’s breach of the contract. These expenses may be awarded in a civil lawsuit in addition to the award of compensatory damages. To explore this concept, consider the following incidental damages definition. Definition of Incidental Noun Something that happens by chance or […]
Read moreA contract containing a statement that gives the person making a promise no actual obligation to fulfill the promise is considered an “illusory promise,” or “illusory contract.” The language in this type of agreement is indefinite and unclear, making it uncertain whether the promising party must perform even if paid or compensated by the other party. This type of agreement […]
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