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Legal TerminologyC corporation Common business slang to distinguish a corporation whose profits are taxed separate from its owners under subchapter C of the Internal Revenue Code, from an S corporation, whose profits are passed through to shareholders and taxed on their personal returns under subchapter S of the Internal Revenue Code. capital case A prosecution for murder in which the jury is also asked to decide if the defendant is guilty and, if he is, whether he should be put to death. When a prosecutor brings a capital case (also called a death penalty case), she must charge one or more special circumstances that the jury must find to be true in order to sentence the defendant to death. Each state (and the federal government) has its own list of special circumstances, but common ones include multiple murders, use of a bomb or a finding that the murder was especially heinous, atrocious or cruel. capital gains The profit on the sale of a capital asset, such as stock or real estate. If you sell your primary residence, you can exclude $250,000 in profit from capital gains tax. A couple can exclude $500,000. capital punishment The decision by a jury, in the second phase of a captital case, that the convicted defendant should be put to death. capitalized interest The accrued interest that is added to the principal balance of a loan while you are not making payments or your payments are insufficient to cover both the principal and interest due. When this happens, you end up paying interest on interest, sometimes called negative amortization. caption A heading on all pleadings submitted to the court. It states basic information such as the parties names, court and case number. carryover basis The tax basis of someone who receives a gift. The recipient's basis is the same as the giver's; it simply carries over when the gift is made. case A term that most often refers to a lawsuit -- for example, I filed my small claims case. Case also refers to a written decision by a judge -- or for an appellate case, a panel of judges. For example, the U.S. Supreme Court's decision legalizing abortion is commonly referred to as the Roe v. Wade case. Finally, the term also describes the evidence a party submits in support of her position -- for example, I have made my case or 'My case-in-chief' has been completed. cash surrender value The amount of cash available upon voluntary termination of an insurance policy before the insurance benefits become payable. cause of action A specific legal claim -- such as for negligence, breach of contract or medical malpractice -- for which a plaintiff seeks compensation. Each cause of action is divided into discrete elements, all of which must be proved to present a winning case. CC&R See covenants, conditions & restrictions. CCCS See Consumer Credit Counseling Service. census An official count of the number of people living in a certain area, such as a district, city, county, state, or nation. The United States Constitution requires the federal government to perform a national census every ten years. The census includes information about the respondents' sex, age, family, and social and economic status. certification mark A name, symbol, or other device used by an organization to vouch for the quality of products and services provided by others, for example, the AAA Approved sign found at hotels. certification of trust See abstract of trust. certified copy A copy of a document issued by a court or government agency guaranteed to be a true and exact copy of the original. Many agencies and institutions require certified copies of legal documents before permitting certain transactions. For example, a certified copy of a death certificate is required before a bank will release the funds in a deceased person's payable-on-death account to the person who has inherited them. challenge for cause A party's request that the judge dismiss a potential juror from serving on a trial jury by providing a valid legal reason why he shouldn't serve. Potential bias is a common reason potential jurors are challenged for cause -- for example, the potential juror is a relative of a party or one of the lawyers, or admits to a prejudice against one party's race or religion. Judges can also dismiss a potential juror for cause. There is no limit on the number of successful challenges for cause. Compare peremptory challenges. chambers A fancy word for a judge's office. Trial court judges often schedule pre-trial settlement conferences and other informal meetings in chambers. Chapter 13 bankruptcy The reorganization bankruptcy for consumers, in which you partially or fully repay your debts. In Chapter 13 bankruptcy, you keep your property and use your income to pay all or a portion of the debts over three to five years. The minimum amount you must pay is roughly equal to the value of your nonexempt property. In addition, you must pledge your disposable net income -- after subtracting reasonable expenses -- for the period during which you are making payments. At the end of the three-to five-year period, the balance of what you owe on most debts is erased. Chapter 13 plan A document filed in a Chapter 13 bankruptcy in which the debtor shows how all of his or her disposable income will be used over a three- to five-year period to pay all mandatory debts -- for example, back child support, taxes, and mortgage arrearages -- as well as some or all unsecured, nonpriority debts, such as medical and credit card bills. Chapter 7 bankruptcy The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your nonexempt property. Chapter 7 bankruptcy takes from three to six months, costs about $200, and commonly requires only one trip to the courthouse. charge A formal accusation of criminal activity. The prosecuting attorney decides on the charges, after reviewing police reports, witness statements and any other evidence of wrongdoing. Formal charges are announced at an arrested person's arraignment. charitable trust Any trust designed to make a substantial gift to a charity and also achieve income and estate tax savings for the person who creates the trust (the grantor). child (1) A son or daughter of any age, sometimes including biological offspring, unborn children, adopted children, stepchildren, foster children and children born outside of marriage. (2) A person under an age specified by law, often 14 or 16. For example, state law may require a person to be over the age of 14 to make a valid will, or may define the crime of statutory rape as sex with a person under the age of 16. In this sense, a child can be distinguished from a minor, who is a person under the age of 18 in most states. A person below the specified legal age who is married is often considered an adult rather than a child. See also emancipation. child support The entitlement of all children to be supported by their parents until the children reach the age of majority or become emancipated -- usually by marriage, by entry into the armed forces or by living independently. Many states also impose child support obligations on parents for a year or two beyond this point if the child is a full-time student. If the parents are living separately, they each must still support the children. Typically, the parent who has custody meets his or her support obligation through taking care of the child every day, while the other parent must make payments to the custodial parent on behalf of the child -- usually cash but sometimes other kinds of contributions. When parents divorce, the court almost always orders the non-custodial parent to pay the custodial parent an amount of child support fixed by state law. Sometimes, however, if the parents share physical custody more or less equally, the court will order the higher-income parent to make payments to the lower-income parent. circuit court The name used for the principal trial court in many states. In the federal system, appellate courts are organized into thirteen circuits. Eleven of these cover different geographical areas of the country -- for example, the United States Court of Appeal for the Ninth Circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington. The remaining circuits are the District of Columbia Circuit and the Federal Circuit, (which hears patent, customs and other specialized cases based on subject matter). The term derives from an age before mechanized transit, when judges and lawyers rode the circuit of their territory to hold court in various places. circumstantial evidence Evidence that proves a fact by means of an inference. For example, from the evidence that a person was seen running away from the scene of a crime, a judge or jury may infer that the person committed the crime. civil Noncriminal. See civil case. civil case A noncriminal lawsuit, usually involving private property rights. For example, lawsuits involving breach of contract, probate, divorce, negligence and copyright violations are just a few of the many hundreds of varieties of civil lawsuits. civil procedure The rules used to handle a civil case from the time the initial complaint is filed through pretrial discovery, the trial itself and any subsequent appeal. Each state adopts its own rules of civil procedure (often set out in a separate Code of Civil Procedure), but many are influenced by or modeled on the Federal Rules of Civil Procedure. Civil Rights Act of 1964 Federal legislation designed to end discrimination based on religion, color, race or national origin. This law guarantees the right of access to education, public facilities and public accommodations, such as restaurants and hotels. It also prohibits discrimination in employment. class action A lawsuit in which a large number of people with similar legal claims join together in a group (the class) to sue someone, usually a company or organization. Common class actions involve cases in which a product has injured many people, or in which a group of people has suffered discrimination at the hands of an organization. cleaning fee A nonrefundable fee charged by a landlord when a tenant moves in. The fee covers the cost of cleaning the rented premises after you move out, even if you leave the place spotless. Cleaning fees are illegal in some states and specifically allowed in others, but most state laws are silent on the issue. Landlords in every state are allowed to use the security deposit to clean a unit that is truly dirty. clear and present danger Speech that poses a clear and present danger to the public or government will not be protected under the First Amendment's guarantee of free speech. The classic example is that shouting Fire! in a crowded theatre is not protected speech. close corporation A corporation owned and operated by a few individuals, often members of the same family, rather than by public shareholders. State laws permit close corporations to function more informally than regular corporations. For example, shareholders can make decisions without holding meetings of the board of directors, and can fill vacancies on the board without a vote of the shareholders. closing argument At trial, a speech made by each party after all the evidence has been presented. The purpose is to review the testimony and evidence presented during the trial as part of forcefully explaining why your side should win. Especially in trials before a judge without a jury, it is common for both parties to waive their closing argument on the theory that the judge has almost surely already arrived at her decision. co-tenants Two or more tenants who rent the same property under the same lease or rental agreement. Each co-tenant is 100% responsible for carrying out the rental agreement, which includes paying the entire rent if the other tenant skips town and paying for damage caused by the other tenant. codicil A supplement or addition to a will. A codicil may explain, modify, add to, subtract from, qualify, alter or revoke existing provisions in a will. Because a codicil changes a will, it must be signed in front of witnesses, just like a will. collateral Property that guarantees payment of a secured debt. collateral estoppel See estoppel. collection agency A company hired by a creditor to collect a debt that it is owed. Creditors typically hire a collection agency only after they have made efforts to collect the debt themselves, typically through letters (called dunning letters) and telephone calls. Collection agencies are regulated by the federal Fair Debt Collection Practices Act. Unfortunately, too many collectors ignore this law. collective mark A name, symbol or other device used by members of a group or organization to identify goods or services it provides. For example, the letters ILGWU on a shirt label signify that the shirt was made by a member of the International Ladies' Garment Workers' Union. collective work For copyright purposes, a work, such as a periodical, anthology or encyclopedia, in which a number of separate and independent works are assembled into one work. To create a collective work, permission must be obtained from the owners of the copyrights of the constituent parts (assuming such parts are not already in the public domain). Although the author of the compilation may not own the copyright to any of the individual parts, the creativity involved in selecting and organizing the constituent materials is in itself protected by copyright. collision damage waiver See loss damage waiver. collision insurance coverage A component of car insurance that pays for damages to the insured vehicle that result from a collision with another vehicle or object. Collision insurance generally covers the amount of damage over and above an amount the insured person must pay, called the deductible amount. collusion Secret cooperation between two people in order to fool another. Collusion was often practiced by couples before no-fault divorce in order to make up a grounds for divorce (such as adultery). By fabricating a permitted reason for divorce, colluding couples hoped to trick a judge into granting their freedom from the marriage. But a spouse accused of wrongdoing who later changed his or her mind about the divorce could expose the collusion to prevent the divorce from going through. comfort care Medical care intended to provide relief from pain and discomfort, such as pain control drugs. comity of nations Courtesy between nations that obligates their mutual recognition of each other's laws. commerce As defined by the Lanham Act, trade that the federal government is authorized to regulate. To qualify for federal trademark protection and registration, a mark must have first been used in commerce. In practice, this means that a product or service must be sold outside of the state in which it originates, be advertised out of state or cater to travelers, such as a hotel, before it can qualify for trademark protection. commercial frustration An unforeseen and uncontrollable event that excuses a party to a contract from performing his or her duties under that contract. For example, a landlord can break a lease if the property she agreed to rent accidentally burns down before the tenants move in. common law marriage In some states, a type of marriage in which couples can become legally married by living together for a long period of time, representing themselves as a married couple and intending to be married. Contrary to popular belief, the couple must intend to be married and act as though they are for a common law marriage to take effect -- merely living together for a long time won't do it. community property A method for defining the ownership of property acquired during marriage, in which all earnings during marriage and all property acquired with those earnings are considered community property and all debts incurred during marriage are community property debts. Community property laws exist in Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin. Compare equitable distribution and separate property. community property with right of survivorship A way for married couples to hold title to property, available in Arizona, California, Nevada, Texas and Wisconsin. It allows one spouse's half-interest in community property to pass to the surviving spouse without probate. comparable rectitude A doctrine that grants the spouse least at fault a divorce when both spouses have shown grounds for divorce. It is a response to an old common-law rule that prevented a divorce when both spouses were at fault. competent evidence Legally admissible evidence. Competent evidence tends to prove the matter in dispute. In a murder trial, for example, competent evidence might include the murder weapon with the defendant's fingerprints on it. compilation For copyright purposes, a work formed by selecting and assembling preexisting materials (generally facts or data unprotected by copyright) in a unique way to form an original work of authorship. A database is a good example of a compilation. A compilation must have some creative aspects -- such as the way it is organized and the materials selected for inclusion -- to qualify for copyright protection. For example, a list of favorite Web sites including the word gelatin, arranged by category, would be rather creative, while a phone directory would not. complaint Papers filed with a court clerk by the plaintiff to initiate a lawsuit by setting out facts and legal claims (usually called causes of action). In some states and in some types of legal actions, such as divorce, complaints are called petitions and the person filing is called the petitioner. To complete the initial stage of a lawsuit, the plaintiff's complaint must be served on the defendant, who then has the opportunity to respond by filing an answer. In practice, few lawyers prepare complaints from scratch. Instead they use -- and sometimes modify -- pre-drafted complaints widely available in form books. comprehensive insurance coverage An element of car insurance that pays for damages to your vehicle caused by anything other than a collision, including vandalism, theft and natural disasters. condemnation See eminent domain. conditions of carriage The terms of your contract with an airline after you buy a ticket. Conditions of carriage cover everything from baggage limitations to the amount of compensation you can recover if you're injured on the flight. These provisions often vary from airline to airline. A few, but by no means most, conditions of carriage appear in the fine print on the back of your ticket. To find out about the rest, you can ask the airline for a copy; it is legally obligated to provide one. The conditions of carriage contain a lot of fine print detail and will not make for exciting reading. condonation One person's approval of another's activities, constituting a defense to a fault divorce. For example, if a wife did not object to her husband's adultery and later tries to use it as grounds for a divorce, he could argue that she had condoned his behavior and could perhaps prevent her from divorcing him on these grounds. confidential communication Information exchanged between two people who (1) have a relationship in which private communications are protected by law, and (2) intend that the information be kept in confidence. The law recognizes certain parties whose communications will be considered confidential and protected, including spouses, doctor and patient, attorney and client, and priest and confessor. Communications between these individuals cannot be disclosed in court unless the protected party waives that protection. The intention that the communication be confidential is critical. For example, if an attorney and his client are discussing a matter in the presence of an unnecessary third party -- for example, in an elevator with other people present -- the discussion will not be considered confidential and may be admitted at trial. Also known as privileged communication. confine See imprison. confinement in prison In most states with fault divorce, grounds for a spouse not in prison to obtain a fault divorce if the other spouse has been imprisoned for a certain number of years. conformed copy An exact copy of a document filed with a court. To conform a copy, the court clerk will stamp the document with the filing date and add any handwritten notations to the document that exist on the original, including dates and the judge's signature. A conformed copy may or may not be certified. connivance A situation set up so that another person commits a wrongdoing. For example, a husband who invites his wife's lover along on vacation may have connived her adultery, and if he tried to divorce her for her behavior, she could assert his connivance as a defense. consanguinity An old-fashioned term referring to the relationship of blood relatives -- people who have a common ancestor. Consanguinity exists, for example, between brothers and sisters but not between husbands and wives. conservator Someone appointed by a judge to oversee the affairs of an incapacitated person. A conservator who manages financial affairs is often called a conservator of the estate. One who takes care of personal matters, such as healthcare and living arrangements, is known as a conservator of the person. Sometimes, one conservator is appointed to handle all these tasks. Depending on where you live, a conservator may also be called a guardian, committee or curator. consideration The basis of a contract. Consideration is a benefit or right for which the parties to a contract must bargain; the contract is founded on an exchange of one form of consideration for another. Consideration may be a promise to perform a certain act -- for example, a promise to fix a leaky roof -- or a promise not to do something, such as build a second story on a house that will block the neighbor's view. Whatever its particulars, consideration must be something of value to the people who are making the contract. Consolidated Omnibus Budget Reconciliation Act (COBRA) A federal law requiring that employers offer employees -- and their spouses and dependents -- continuing insurance coverage if their work hours are cut or they lose their job for any reason other than gross misconduct. Courts are still in the process of determining the meaning of gross misconduct, but it's clearly more serious than poor performance or judgment. COBRA also makes an ex-spouse and children eligible to receive group rate health insurance provided by the other ex-spouse's employer for three years following a divorce. consortium (1) A group of separate individuals or companies that come together to undertake an enterprise or transaction that is beyond the means of any one member. For example, a group of local businesses may form a consortium to fund and construct a new office complex. (2) The duties and rights associated with marriage. Consortium includes all the tangible and intangible benefits that one spouse derives from the other, including material support, companionship, affection, guidance and sexual relations. The term may arise in a lawsuit if a spouse brings a claim against a third party for loss of consortium after the other spouse is injured or killed. constable A peace officer for a particular geographic area -- most often a rural county -- who commonly has the power to serve legal papers, arrest lawbreakers and keep the peace. Depending on the state, a constable may be similar to a marshal or sheriff. constructive eviction When a landlord provides housing that is so substandard that a landlord has legally evicted the tenant. For example, if the landlord refuses to provide heat or water or refuses to clean up an environmental health hazard, the tenant has the right to move out and stop paying rent, without incurring legal liability for breaking the lease. Consumer Credit Counseling Service (CCCS) A national non-profit agency that, at no cost, helps debtors plan budgets and repay their debts. One major criticism of CCCS is that each office is primarily funded by voluntary donations from the creditors that receive payments from debtors repaying their debts through that office. Despite this criticism, most CCCS counselors provide clients with thorough and neutral advice. Consumer Leasing Act A federal law that requires lease agreements to include certain terms, including a statement of the number of lease payments and their dollar amounts, penalties for not paying on time and whether a lump sum payment is due at the end of the agreement. Despite this law, many vehicle lease agreements are nearly impossible to decipher.
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