Legal Terms Glossary

A written statement confirmed by oath or affirmation, used as evidence in court. The person making the affidavit (called the affiant) swears that the information is true and accurate.

An employment relationship where either the employer or employee can terminate the employment at any time, for any legal reason, with or without notice. This is the default employment type in most US states.

A legal document that specifies a person's healthcare wishes in advance, in case they become unable to communicate. It typically includes a living will and healthcare power of attorney.

A formal document filed with the state to legally create a corporation. It includes the company name, purpose, registered agent, and authorized shares of stock.

A legal document that transfers ownership of personal property from a seller to a buyer. It serves as proof of the transaction and typically includes details about the item, purchase price, and parties involved.

A person or entity designated to receive assets, benefits, or proceeds from a will, trust, insurance policy, or other legal arrangement.

Something of value exchanged between parties in a contract. This can be money, property, services, or a promise to do (or not do) something. Consideration is essential for a contract to be legally binding.

A formal letter or order demanding that a person or entity stop a specific activity that is allegedly illegal or infringing on rights. It serves as a warning before legal action.

A person named in a will to carry out the deceased person's wishes, including distributing assets, paying debts, and managing the estate through probate. Also called a personal representative.

The legal process by which a landlord removes a tenant from rental property. Eviction requires proper notice and, if the tenant doesn't leave voluntarily, a court order. Reasons include non-payment of rent or lease violations.

A deposit made by a buyer to demonstrate serious intent to purchase property. It is held in escrow and applied to the purchase price at closing, or returned if the deal falls through under contract terms.

An arrangement where a neutral third party holds funds or documents until specified conditions are met. Commonly used in real estate transactions to hold earnest money and closing funds.

A person or entity that has a legal obligation to act in the best interest of another party. Fiduciaries include trustees, executors, agents under power of attorney, and corporate directors.

The person or entity that transfers property or rights to another party (the grantee). In real estate, the grantor is the seller or person giving away property rights.

The person or entity that receives property or rights from another party (the grantor). In real estate, the grantee is the buyer or person receiving property rights.

A self-employed person who provides services to clients under a contract. Unlike employees, independent contractors control how they complete work, provide their own tools, and are responsible for their own taxes.

A contractual obligation where one party agrees to compensate another for losses, damages, or liabilities. Common in service agreements, construction contracts, and waivers.

A legal claim against property as security for a debt or obligation. The property cannot be sold or transferred until the lien is satisfied (paid off). Common types include mortgage liens, tax liens, and mechanic's liens.

A contract between a landlord (lessor) and tenant (lessee) that grants the tenant the right to use property for a specified period in exchange for rent payments. The lease outlines terms, conditions, and responsibilities of both parties.

A legal document that specifies a person's wishes regarding medical treatment if they become unable to communicate. It typically addresses life-sustaining treatment, artificial nutrition, and end-of-life care preferences.

A business structure that combines the liability protection of a corporation with the tax flexibility of a partnership. Members are not personally liable for company debts.

A legal claim placed on a property by a contractor, subcontractor, or supplier who has not been paid for work performed or materials provided for improvements to that property.

An official authorized by the state to witness signatures, administer oaths, and certify documents. Notarization helps prevent fraud by verifying the identity of signers and ensuring they sign voluntarily.

A legal contract that creates a confidential relationship between parties. The signing party agrees not to disclose specified information to third parties. Commonly used in business to protect trade secrets and proprietary information.

A contract restricting an employee or contractor from competing with the employer for a specified time and within a geographic area after the working relationship ends.

A legal document that outlines the ownership structure, management rules, and operating procedures of an LLC. It defines member roles, profit distribution, and decision-making processes.

A legal document that gives one person (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal). This can include managing finances, making healthcare decisions, or signing documents.

In a power of attorney, the person who grants authority to another person (the agent) to act on their behalf. The principal is the one whose interests are being represented.

A written promise to pay a specific amount of money to a specific person or entity by a certain date. It includes the principal amount, interest rate (if any), payment schedule, and consequences of default.

The legal process of validating a will and administering a deceased person's estate. Probate involves proving the will is valid, inventorying assets, paying debts, and distributing remaining assets to beneficiaries.

A contract entered into before marriage that outlines how assets, debts, and spousal support will be handled in the event of divorce or death. Also called a premarital agreement.

A legal document that transfers whatever interest the grantor has in a property to the grantee, without any warranties or guarantees about the title. Often used between family members or to clear title issues.

Money paid by a tenant to a landlord at the beginning of a lease to cover potential damages or unpaid rent. The deposit is typically returned at the end of the lease if the property is in good condition.

A contract clause stating that if one provision is found invalid or unenforceable, the remaining provisions continue in effect. This protects the overall agreement from being voided entirely.

The person who creates and signs a will. The testator must be of legal age (usually 18) and of sound mind. A female testator is sometimes called a testatrix.

A person or institution that holds and manages assets in a trust for the benefit of the beneficiaries. The trustee has a fiduciary duty to act in the best interests of the trust beneficiaries.

The practice of charging an illegally high or excessive interest rate on a loan. Each state sets maximum allowable interest rates, and exceeding them can void the loan or result in penalties.

A person who observes the signing of a legal document and signs it themselves to confirm they saw the signature occur. Witnesses help verify the authenticity of signatures and that signers acted voluntarily.

A deed that guarantees the grantor holds clear title to the property and has the right to sell it. The grantor warrants against all claims, providing the highest level of buyer protection.