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Lawpack - Legal glossary
Category: Legal
Date & country: 10/01/2008, UK
Words: 253

The absolute ownership of land and rights over land for an indefinite time. Contrast Leasehold where the ownership is limited in time.

An unexpected and unintentional event that makes the fulfilment of the terms of a contract impossible.

The acceptance by a seller of a higher offer despite having previously accepted a lower one from another buyer. In England and Wales, a seller is entitled to do this provided contracts have not been exchanged. The position is different in Scotland.

The submission by a buyer of a lower offer despite having previously agreed a higher price. In England and Wales, a buyer is entitled to do this provided contracts have not been exchanged; the position is different in Scotland.

The amount borrowed as a proportion of the amount invested. The greater the borrowing, the greater the gearing (and the risk).

General meeting
Of companies, a meeting of shareholders, being either an Annual General Meeting or an Extraordinary Meeting.

General power of attorney
A short form of power prescribed by the General Powers of Attorney Act 1971 by which the donor of the power authorises his attorney to do anything that he could have done himself. Such powers end if the donor becomes mentally incapable of managing his own affairs. Contrast Enduring Powers of Attorney.

Good faith
Done with honest intention.

Grant of letters of administration
An official document obtained by Administrators of an estate proving that they have the legal authority to deal with a deceased's estate.

Grant of probate
An official document issued to the executors by the Probate Registry proving that they have the legal authority to deal with a deceased's estate. In Scotland, it is called a Confirmation.

Ground rent
A rent, substantially below the market rate, payable by a tenant usually of a long lease for which a capital sum (premium) was paid at the beginning.

Group litigation order
A court order which allows cases covering similar issues to be managed together.

An undertaking to be responsible for the performance of another person's legal obligations. A bank may ask the directors to guarantee a company's overdraft. A landlord may ask a tenant to find a guarantor that the rent will be paid and the tenant's covenants performed.

A person with legal control of, and responsibility for, a child.

Hearsay, hearsay evidence
Evidence based on something the witness has been told but did not experience for himself at first hand. As such, it is treated with caution and may not be admitted at all if the original source is available to give evidence in person.

Highway Code
A booklet issued by the Department of Transport giving guidance on the use of the roads.

See Pledge.

Inheritance tax, charged upon a deceased's estate and on gifts which fall outside the exemption limits.

Implied terms
Terms that are not expressly stated in a contract but are derived from custom and usage or are necessary to make it work from a business point of view.

To create a limited company.

An undertaking by one person to save another harmless from loss. Most insurance policies and many guarantees come within the definition of indemnity.

Insolvent estate
An estate which has liabilities, including funeral and administration expenses, that exceed its assets.

Interest only mortgage
A mortgage under which the borrower only pays interest during the mortgage term and the whole of the capital is repaid at the end.

Someone who dies without leaving a valid will. The estate itself is then also described as intestate.

Individual Savings Account. Provided that certain rules are observed, these accounts enjoy tax benefits.

ISA mortgage
This ressembles an endowment mortgage but the saving scheme is an ISA and the contibutions are restricted.

All of the children, grandchildren and remoter descendants of a person, whether born within or outside marriage, including adopted children.

Issued shares
Shares which have been allotted by a company to its shareholders. Contrast Authorised capital.

Joint tenancy
See Beneficial joint tenants.

The terms 'judgment' and 'order' include any decision given by a court on a question in dispute before the court. Judgments bind the parties to the action but do not normally affect others. Exceptionally, a judgment 'in rem' decides the status or ownership of a thing, typically a building, a ship or a work of copyright, and is binding on the whole …

Judicial separation
A decree of the court, which declares the parties to be legally separate, without dissolving the marriage. It can include a financial settlement.

Judicial Studies Board Guidelines
A set of guidelines used to decide the amount of damages for the 'pain, suffering and loss of amenity' element in a claim.

The authority of courts to deal with a case. As a rough guide, courts will assume jurisdiction if the defendant is physically present and so can be served with the proceedings or if the defendant submits to the jurisdiction or if the court is persuaded that the circumstances are such that the claimant ought to be allowed to serve the proceedings ab …

The effect of a knock-for-knock agreement between insurers is that, in the event of an accident involving more than one insured vehicle, each insurer carries the risk of the damage to the vehicle it has insured. This applies regardless of who may be legally responsible. So that may result in an innocent party losing a no-claims bonus. But the agree …

Pronounced 'lay-cheese', this means unacceptable delay in pursuing a claim in equity but applies only where there are no fixed statutory time limits. See Limitation.

A gift in a Will. Cash gifts are called 'pecuniary legacies', gifts of specified objects are called 'specific legacies' and a right to receive a share of the residue is called 'a residuary legacy'.

Legal Aid
Now replaced by Community Legal Services Funding.

A person entitled to a legacy under a Will.

Letters of administration
An official document obtained by administrators of an estate proving that they have the legal authority to deal with a deceased's estate.

Life interest
The right to receive the income from, or to enjoy the occupation of, property for the lifetime of the life tenant. In Scotland, it is called a liferent. It will usually arise under the terms of a trust deed or Will but may arise by operation of law. When the life tenant dies, the property does not pass with his estate but goes to the beneficiaries …

Limitation, limitation period
A statutory time limit within which an action must be brought. As a rough guide, claims for personal injury must be brought within three years and other claims within six years but these limits may be extended if the claimant did not know, at the time the wrongful act was committed, that it would give him a right to claim. Employees who worked with …

Someone who runs his own case and represents himself, rather than hiring a lawyer.

Litigation friend
Someone who represents a child (or patient) in litigation.

The use of a mediator to help reach a settlement in a dispute. Mediation differs from arbitration in that a mediator will not come down on one side or the other and make an award. The aim of mediation is to persuade the parties to reach agreement and not to impose a ruling that has to be obeyed. Some County Courts now operate mediation schemes, whi …

Memorandum of Incorporation
The part of a company's charter or byelaws that defines the extent of its objects and its authorised capital. A company cannot act outside its permitted objects. See Ultra vires.

In England, a person under the age of 18. In Scotland, a person under 16.

A claimant has a duty to limit his loss or injury where reasonably possible. Thus an employee who is wrongfully dismissed must seek alternative employment and, if he finds it, the earnings from his new employment will be offset against his damages. But he is not obliged to accept an offer of employment that is unsuited to his skills or experience.

Mortgage or Legal charge
An arrangement by which a borrower (the mortgagor) provides a lender (the mortgagee) with security for the repayment of a loan. In the typical case of a house mortgage, the borrower continues to occupy the property and will assume full ownership again when the loan is repaid. However, if payments are not made to the lender, he may take steps to enf …

Motor Insurers' Bureau
A group of motor insurers, which has agreed with the government to provide cover in certain circumstances, notably where a motorist responsible for an accident has no compulsory third party insurance.

Negative equity
When the amount owing to the mortgagee exceeds the market value of the property provided as security, the difference is called the negative equity.

Everyone owes a duty to take reasonable care not to injure or cause loss to his neighbour. If he fails to do so and the neighbour suffers damage as a result, the tort of negligence has been committed. The courts are constantly considering exactly what is reasonable and who is a neighbour, and it has been said that the categories of negligence are n …

Net wages
The pay received by an employee after all employer's deductions, such as tax and national insurance, have been subtracted.

A conditional fee agreement between a solicitor and client that the solicitor will be paid only if the client's claim is successful.

Nominal share capital
The amount of share capital that a company is allowed to issue. When the company is incorporated, this is stated in its Memorandum of Association. For example, '£100 divided into 100 shares of £1 each. The shares are then said to have a nominal, or 'par', value of £1 each and, if the company wants to issue more than 100 of them, it must pass a reso …

OFT (Office of Fair Trading)
The organisation set up to police the Fair Trading Act designed primarily to protect the rights of consumers.

An official appointed to investigate complaints by individuals against maladministration by public authorities. There is a Legal Services Ombudsman whose website is

See Judgment.

Pain, suffering and loss of amenity
All three are considered when deciding the amount of damages due for an injury. 'Loss of amenity' is the effect that the injury has on the victim's ability to perform everyday activities and participate in the enjoyments of life. See Judicial Studies Board Guidelines.

Particulars of Claim
The document by which a claimant gives details of the facts on which his claim is based.

In general parlance, a person receiving medical treatment but, in law, particularly a person suffering from a mental disorder that makes him unable to manage his own affairs.

Payment in advance
Payment of a regular sum, like rent or salary, at the beginning of the period to which it relates.

Payment in arrears
Payment of a regular sum, like rent or salary, at the end of the period to which it relates.

Pecuniary legacy
A gift of money in a Will.

Pension mortgage
This resembles an Endowment mortgage but the saving scheme is a pension. It has various tax benefits but there are restrictions on total contributions and the borrower's age at the end of the term.

Per stirpes
Dividing property between a number of beneficiaries according to the branches of the family instead of equally between them.

Personal property
All property other than real property. Personal property, or personalty, is contrasted with interests in land, or realty, for historical reasons but there are still important differences, for example in the way they can be transferred.

Personal representatives
People who wind up the estate of someone who has died. The expression includes both executors appointed by a Will (who are granted probate) and administrators in the case of intestate estates (who are granted letters of administration). Administrators in Scotland are called 'executors-nominate'.

Period of incapacity for work. Four or more consecutive days when the employee is too ill to work.

Plaintiff, or claimant
Someone who makes a claim in court against a defendant for a remedy such as damages.

A pledge arises when documents of title or goods are deposited by one person (pledgor) with another (pledgee) to be held as security for the payment of a debt or the discharge of an obligation upon the understanding that they will be returned once the obligation is discharged. Physical delivery may be sufficient but a memorandum of deposit, or lett …

The counting of votes cast for or against a proposition, especially at company meetings of the shareholders. Usually matters will be decided by a show of hands of those present (one vote each) and a poll will be held only if demanded. On a poll, each share normally has one vote but special voting rights may be conferred by the Articles of Associati …

Power of Attorney
A formal, written authority granted by one person, the Donor, to another, the Attorney, enabling the Attorney to act on the Donor's behalf and manage his financial interests. See Enduring Power of Attorney and General Power of Attorney.

Power reserved letter
A letter issued by the Probate Registry which an executor signs to put his or her duties on hold for the time being.

The purchase by one person before an opportunity is offered to others. Also the right to make such a purchase. This is commonly given to shareholders in private companies so that, if new shares are to be issued or existing shares are to be sold, they must first be offered to the existing shareholders.

Pro bono
Work done by a lawyer for no fee.

A document authorising a person to represent someone else, especially someone who is a member of a company unable to attend a meeting. The term also describes the appointed person and the vote cast by him. Notice of intention to appoint a proxy has to be sent to the company in advance of a meeting.

Public Trustee
A Government department that can be entrusted with the administration of a Will, the guardianship of children or as a trustee or general administrator. It is often used for people who, for financial or other reasons, are unable to act for themselves.

Quarter day
The four traditional quarter days are 15 March, 24 June, 29 September and 25 December. Easy to remember because, apart from Christmas, the dates follow the number of letters in the month.

Quickie divorce
Informal name for the special procedure for undefended divorces based on the facts of adultery or unreasonable behaviour (99 per cent of divorces are achieved this way).

The number of persons who must attend a meeting in order for it to be validly held. The Articles of Association of most companies provide that, if a quorum is not present, the meeting must be adjourned to a new date but, if a quorum is still not present then, the meeting can go ahead.

Rack rent
Full market rent. Contrast Ground rent.

Confirmation of an act or of the validity of an act.

Real property, realty
The ownership of the freehold in land and certain interests over land like easements. Contrast Personal property.

Any compounding of future payments but especially the discharge of a mortgage by paying off the loan and obtaining the release of the property. A redemption penalty may sometimes be payable for early redemption of a mortgage.

Dismissal from employment because the job no longer exists.

Registered land
Land or buildings the ownership of which is registered at HM Land Registry. The Land Registration Act which came into force on 14 October 2003 has greatly extended the categories of compulsory registration, e.g. they now include all leases of seven years or more.

Registered office
The official address of a company as registered at Companies House.

Paying off an existing mortgage and entering into a new one, usually to obtain a lower rate of interest or a larger loan.

The compensation payable for service under an employment agreement.

Repayment mortgage
A mortgage under which the borrower pays the interest and capital over the life of the mortgage.

Regaining or retaking of possession of property when a purchaser or borrower defaults in making payments. Typically, a finance company may repossess goods sold on hire purchase or a mortgagee may repossess a borrower's property in order to sell it to meet outstanding payments due under a mortgage.

Representative order
An order made where one person represents others in a case. This might be suitable where many litigants have the same interests as each other.

Residuary beneficiary
A beneficiary entitled to receive all or part of the residue of an estate.

Residuary gift, legacy
A legacy of all or part of the residue of an estate.

The remainder of an estate after all tax, debts, administration expenses and specific gifts and legacies have been paid.

A Board resolution is a decision taken by the directors of a company. An Ordinary resolution is a decision passed by a simple majority of shareholders of a company. A Special resolution is a decision passed by a 75 per cent majority of the shareholders of a company.

A person against whom relief is sought by an applicant.

Response pack
The pack of documents sent to the defendant by the court with a claim form.

Restrictive covenant
An agreement by the owner of land (the servient land) not to do something, like build on the land. If such a covenant is made with the owner of land nearby, it may be enforceable against subsequent owners of the servient land. An undertaking in an employment agreement that the employee will not do certain things, like work for a competitor, after …

RRA (Race Relations Act 1976)
This Act bans discrimination based on colour, race, nationality, or ethnic or national origin in employment, services and housing.