Legal Glossary
Plain-English definitions of common business law, IP, contract, and collection terms — written by California attorneys for owners and operators.
A
- Anticipatory Breach
- A clear indication by one party that they will not perform a contractual obligation, allowing the other party to act before the actual breach occurs.
- As Is
- A clause stating that the buyer accepts an item in its current condition with all faults, the seller makes no warranties about quality, performance, or fitness.
- Asset Purchase Agreement
- A contract for the sale of specific assets (rather than stock) of a business, allocating which liabilities transfer to the buyer.
B
- Bylaws
- Internal rules adopted by a corporation to govern its management, meetings, voting, and officers.
C
- C-Corporation
- A corporation taxed separately from its owners under Subchapter C of the Internal Revenue Code.
- Cease and Desist Letter
- A formal demand that a party stop allegedly unlawful conduct, often the first step before litigation.
- Compensatory Damages
- Monetary damages awarded to compensate a party for actual losses caused by another's breach or wrong.
- Contract of Adhesion
- A standard-form contract drafted by the stronger party and presented to the weaker party on a take-it-or-leave-it basis, with no real opportunity to negotiate.
- Copyright
- A federal right granted to the creator of an original work of authorship to control its reproduction, distribution, and adaptation.
- Covenant Not to Sue
- A promise by one party not to bring legal action against another, usually exchanged for a settlement, payment, or release of a separate obligation.
D
- Demand Letter
- A written communication asserting a legal claim and requesting payment, performance, or other action.
- Due Diligence
- Investigation of a business, transaction, or counterparty before entering an agreement.
E
- Easement
- A non-possessory right to use another's land for a specified purpose.
F
- Fiduciary Duty
- A legal obligation to act in the best interest of another party, common between officers/directors and a company.
G
- Garnishment
- A court order directing a third party (often an employer or bank) to withhold funds belonging to a debtor.
I
- Indemnification
- A contractual promise by one party to compensate another for specified losses or claims.
- Injunction
- A court order requiring a party to do or refrain from doing a specific act.
J
- Judgment
- A court's final decision in a lawsuit, which may be enforced through garnishment, levies, or liens.
L
- LLC (Limited Liability Company)
- A business entity combining limited liability with pass-through taxation.
- Liquidated Damages
- A pre-agreed amount specified in a contract to be paid upon breach, in lieu of proving actual damages.
M
- Mediation
- A confidential dispute-resolution process in which a neutral third party helps the parties negotiate.
- Mirror Image Rule
- A common-law rule requiring acceptance of an offer to match the offer exactly, any variation transforms the response into a counter-offer.
- Mutual Assent
- The shared agreement of contracting parties on the same essential terms, the "meeting of the minds" required to form a valid contract.
N
- NDA (Non-Disclosure Agreement)
- A contract restricting disclosure of confidential information.
- Novation
- The substitution of a new contract, or a new party, for an existing one, extinguishing the original obligations with the consent of all parties.
O
- Office Action
- A written communication from the USPTO raising issues with a trademark application.
- Operating Agreement
- The governing document of an LLC, setting out ownership, management, and economic terms.
P
- Probate
- The court-supervised process of administering a deceased person's estate.
- Promissory Estoppel
- A doctrine that enforces a promise, even without consideration, when the promisee reasonably relied on it to their detriment.
- Promissory Note
- A written promise to pay a specified sum, often used in business loans and seller financing.
Q
- Quitclaim Deed
- A deed transferring whatever interest the grantor has in property, without warranty of title.
R
- Restraining Order
- A court order temporarily prohibiting specified conduct, often used in disputes pending hearing.
S
- S-Corporation
- A corporation that elects pass-through tax treatment under Subchapter S of the Internal Revenue Code.
- Specific Performance
- A court remedy compelling a party to perform a contractual obligation, used when damages are inadequate.
- Statement of Use
- A USPTO filing demonstrating actual commercial use of a trademark, required to complete registration.
T
- Trade Secret
- Confidential business information that derives value from not being publicly known and is reasonably protected.
- Trademark
- A word, name, symbol, or device used to identify and distinguish goods or services in commerce.
U
- USPTO
- United States Patent and Trademark Office, the federal agency that examines and registers trademarks.
V
- Venue
- The geographic location where a case may properly be filed or tried.
W
- Warranty
- A contractual promise that a fact or condition is true, or will be, backed by liability if the promise turns out to be false.
- Will
- A legal document directing how a person's property is to be distributed after death.
- Writ of Execution
- A court order authorizing the seizure of a debtor's property to satisfy a judgment.
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