Daniel Oran - Oran's Dictionary of the Law

198 Finance charge

Finance charge The interest or other payment made in addition to the price of goods or services paid off in installments or “on time.” This does not include late charges, collection expenses, etc. It must often be expressed as an annual percentage rate (see that word).

Finance committee 1. A U.S. Senate committee (see those words) that handles taxation and related matters. It is comparable to the House Ways and Means Committee. 2. A committee of a company’s board of directors that makes major financial decisions.

Financial institution Any bank, trust company, credit union, savings and loan association, or similar organization licensed by a state or the U.S. government to do financial business.

Financial lease A long-term property lease that cannot be canceled and that provides no maintenance or other services.

Financial planning Integrated planning that includes such things as investment, insurance, tax, retirement, and estate planning.

Financial responsibility acts State laws requiring insurance, posting a bond, or a cash payment by applicants for a motor vehicle license or registration.

Financial statement A summary of what a company or other organization owns and what it owes. It may be in the form of a balance sheet, a profit and loss statement, or an annual report. This is not a financing statement.

Financing statement A paper, filed on the proper public records, that shows a security interest in goods. This is not a financial statement.

Finder A person who brings together two companies for a merger, who secures a mortgage for a borrower, who locates an underwriter (see underwrite) for a company issuing stock, etc., usually for a fee, often called a “finder’s fee.”

Finder of fact See trier of fact.

Finding A decision (by a judge, jury, hearing examiner, etc.) about a question of fact; a decision about evidence. It is often called a “finding of fact ” upon which a “conclusion of law ” may be based.

Fine Payment of a sum of money imposed by a court. A fine may be a civil or a criminal penalty.

Fire sale A sale at reduced prices due to fire or water damage or, sometimes, any emergency. Fire sales often require special licenses and are regulated to protect consumers.

Firefighter’s rule The principle that an owner or occupant of property is not liable to firefighters or police officers for unintentional injuries caused by the problem that brought them to the property.

Fix bail 199

Firm offer A merchant’s written offer (see that word) to buy or sell goods, that will be held open for a certain length of time. It is a type of option that requires no consideration (see that word) to be valid.

First Amendment The U.S. constitutional amendment that guarantees freedom of speech, religion, press, and assembly as well as the right to petition the government.

First chair Head lawyer of an in-court legal team.

First degree The most serious form of a particular crime that has more than one type. For example, first degree murder includes premeditation or extreme atrocity or cruelty, or is done in the commission of a major felony.

First impression New. A case or a question is “of first impression” if it presents an entirely new problem to the court and cannot be decided by precedent.

First instance A court of first instance is a trial court as opposed to an appeals court.

First mortgage (or lien) The mortgage (or lien) that has the right to be paid off before all others. This is not necessarily the first in time.

First offender A person who has never before been convicted of a crime and who may be entitled to more lenient treatment, such as a short sentence, diversion rather than prosecution, or expungement of the arrest record.

First refusal See right of first refusal.

First sale doctrine The right to sell or display something obtained lawfully under copyright law.

Fiscal Financial. The fiscal year is a period of time, equal in length to a calendar year, but starting on the day that the state or company uses as “day one” for its business records. This is often January, April, July, or October first.

Fishing trip (or expedition) 1. Using the courts to find out information beyond the fair scope of the lawsuit. 2. The loose, unfocused questioning of a witness or the overly broad use of the discovery process.

Fitness for a particular purpose If a merchant knows or should know that an item is to be used by a buyer for a particular purpose, the merchant is responsible (absent a statement to the contrary to the buyer) for that item’s fitness for the purpose. Such “warranty of fitness for a particular purpose” is in most cases an implied warranty.

Fix bail Determine the amount of bail or the bail bond required for a defendant to go free pending trial. A judge or magistrate does this.

200 Fixation

Fixation See fixed work.

Fixed assets Property such as land and machinery used in a company’s business. Fixed assets are not part of a company’s merchandise; are used up slowly, if at all; and are sometimes referred to as “property, plant, and equipment.”

Fixed capital 1. Fixed assets. 2. The money permanently invested in a business.

Fixed charges (or fixed costs) Business costs that continue whether or not business comes in; for example, rent.

Fixed opinion Bias or prejudgment about a person’s guilt or liability that should disqualify a juror for lack of impartiality.

Fixed sentence See sentence no. 2.

Fixed trust A nondiscretionary trust.

Fixed work Under copyright law, a new work is “fixed ” or “created ” when it is put in stable, tangible form, such as written on paper, recorded on film, sculpted in clay, etc. This fixation gives the author of the work an “automatic” copyright, whether or not the correct formalities are followed (although registering the work with the Copyright Office and putting proper copyright notice on it gives the work added protections).

Fixture Anything attached to land or a building. The word sometimes refers to attached things that, once attached, may not be removed (by a tenant or by a person selling a building) and sometimes refers to those things attached that may be removed. A trade fixture is a fixture attached by a tenant for reasons of commercial gain.

Flag of convenience The flag of a merchant ship registered in a country that has low costs or low safety requirements rather than registration in the country where it is owned or does most of its business.

Flagrante delicto (Latin) 1. In the act of committing the crime. 2. Popularly used to mean lovers caught together in bed.

Flat rate A fixed amount of money paid each time period rather than paying at fluctuating levels (for electricity used, for services used, etc.).

Flat sentence See sentence no. 2.

Flat-benefit plan A pension plan (see that word) or other employee benefit plan with a value to each employee that is unrelated to that employee’s salary level (pays the same to everyone, pays more by years of service, etc.).

Flee to the wall doctrine The principle that a person must try every reasonable way of escape before killing an attacker. Compare with true person doctrine.

Followed 201

Flight Leaving or hiding to avoid arrest or prosecution.

Flipping 1. Popular word for refinancing consumer loans, often at higher rates of interest. 2. Popular word for purchasing and quickly reselling real estate for profit. 3. Popular word for buying a large block of a new stock to drive up the price, then selling it at a profit. This often works because those who underwrite the stock temporarily support its price.

Float 1. The time between the deposit of a check in one bank and its subtraction from an account in another bank. This is “free” use of the money by the person who wrote the check. 2. To let a national currency’s value against other currencies change freely depending on supply and demand rather than by one or both countries’ fixing or “pegging” the “exchange rate” by law or otherwise. 3. See the six floating words following this definition, in most of which “floating” means “changeable.”

Floating capital Money available to pay short-term debt and other current expenses.

Floating debt Short-term debt.

Floating interest rate An interest rate that varies according to changes in some external financial measure, such as the prime rate.

Floating lien An arrangement in which later property purchased by someone with a secured debt or lien (see those words) on property becomes subject to that debt or lien, and the original property remains subject to the lien until all debts are paid.

Floating (or floater) policy A supplemental insurance policy to cover items such as jewelry that frequently change location or quantity.

Floating stock (or bonds) Issuing and selling stock (or bonds).

Floor 1. The right to speak in a meeting or legislature is called holding the floor. 2. The central meeting place of a legislature or stock (or similar) exchange. 3. A lowest limit.

Floor plan financing A loan to a retail seller that is secured by the items to be sold and that is paid off as each sells.

Flotsam The wreckage of a ship or its goods found floating in the water or washed up on land. Compare with jetsam.

Fluctuating clause See escalator clause.

Fm.H.A. See F.H.A.

Followed A case is followed by a later case if it is relied upon as precedent (see that word) to decide the later case.

202 For cause

For cause For a sound legal reason, as opposed to merely a stated reason. To remove an official from a job for cause may require a better reason than “because we didn’t like certain actions he took or like the way he handled his job.” It usually requires proof that the official lacked the ability or fitness to do the job right.

Forbearance 1. Refraining from action (especially action to enforce a right). 2. Holding off demanding payment on an overdue debt. 3. The “forbearance rule” or “patient forbearance rule” is the principle that, in most circumstances, a person does not lose a right merely because the person did not enforce the right quickly. For example, if a wife puts up with abuse, this does not automatically stop the wife from getting a divorce based on that abuse.

Force 1. A cause of something, such as an intervening cause or force majeure. 2. Violence or compulsion, whether lawful or not. 3. Unlawful or wrongful violence. For example, forcible entry is taking possession of or entering another person’s property against that person’s will or by using “force” in its ordinary meaning. 4. “In force” means “in effect and valid.”

Force majeure (French) Irresistible, natural, or unavoidable force; for example, an earthquake. See act of God for further discussion. [pronounce: force ma-zhur]

Forced heir A person who cannot be deprived of a share of an estate unless the testator (person making a will) has a recognized legal cause for disinheriting the person.

Forced sale 1. A court-ordered sale of property, especially a sale in which the proceeds are to be used to pay a judgment or otherwise pay a debt. 2. Popular term for a sale caused by financial hardship.

Forcible detainer 1. The act of a person who refuses to give up occupancy of land or a building to the rightful owner or tenant; most often the refusal of a person to leave when occupancy rights end. 2. The summary (quick) court process for getting back land or a building held as in no. 1. Also called forcible entry and detainer.

Foreclosure An action by a person who holds a mortgage to: 1) take the property away from the mortgagor (such as the homeowner); 2) end that mortgagor’s rights in the property; and 3) sell the property to pay off the mortgage debt. Both the process (which is usually but not always done by lawsuit) and the result are called “foreclosure.”

Foreign Belonging to, coming from, or having to do with another country or another state. For example, a Maine court would call a corporation incorporated in and based in Ohio a “foreign corporation.”

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Foreign agent 1. A person who must register with the federal government as a lobbyist, advertising agency, or other representative of a foreign country or company. See also lobbying acts. 2. A spy or other person who works for a foreign country.

Foreign exchange Trading or exchanging the money of one country for that of another.

Foreign service The part of the State Department, including ambassadors and their staffs, that represents the U.S. to foreign governments.

Foreign situs trust A trust that exists because of foreign laws.

Foreign substance A substance or thing found where it should not be and where it does not occur naturally, such as a sponge left behind by a doctor in a patient’s body or a nail in a can of beans.

Foreign trade zone An area of a country where component parts and raw materials may be imported tax-free until the finished product enters that country’s market or is re-exported. See also free port.

Forensic Having to do with courts and law. For example, forensic medicine is medical knowledge or medical practice involved with court testimony or other legal matters. And forensics refers to both firearms evidence and to the skill of making reasoned arguments.

Foreperson (man, woman) The leader chosen to speak for the jury. Foreseeability The degree to which the consequences of an action

should have been anticipated, recognized, and considered beforehand. Not hindsight.

Forestall the market Abbroachment.

Forfeit To lose the right to something due to neglect of a duty, due to an offense, or due to a breach of contract. For example, if a criminal defendant fails to show up for trial, the judge may order a forfeiture of the defendant’s bail bond. [pronounce: for-fit]

Forgery 1. Making a fake document (or altering a real one) with intent to commit a fraud. 2. The document itself in no. 1.

Foris (Latin) On the outside; put out. For example, forisfactura is a “putting out” or forfeiture.

Form 1. A model to work from (or a paper with blanks to be filled in) of a legal document such as a contract or a pleading. 2. The language, arrangement, conduct, procedure, or legal technicalities of a legal document or a legal proceeding, as opposed to the “substance“ (subject, meaning, and legal importance) of the document or proceeding. 3. See forms of action.

Forma pauperis In forma pauperis.

204 Formal

Formal 1. In form only. For example, a formal party is a person who is involved in a lawsuit in name only and has no real interest in the proceedings. The opposite of real, substantial, etc. 2. Fully formalized. For example, a formal contract is written, as opposed to oral, and contains all the necessary legal language, signatures, etc. The opposite of informal.

Formbook A collection of legal forms with summaries of relevant law and information on how to use the forms.

Formed design A deliberate and set intention to commit a crime (particularly a killing).

Former adjudication Either estoppel by judgment or res judicata. Former jeopardy See double jeopardy.

Forms of action Once, the special, individual, technical ways each different type of lawsuit was brought in court. If a legal problem did not fit into one of the forms of action (such as assumpsit, debt, detinue, ejectment, replevin, trespass, trespass on the case, and trover), it could not be brought to court. These have all been replaced under state and federal rules of civil procedure. Under the Federal Rules of Civil Procedure, they are now all civil actions.

Formula instructions Jury instructions of the type: “if you find these facts to be true, then your verdict must be for that party.” Compare with affirmative charge.

Fornication Sexual intercourse between a man and a woman not married to each other.

Forswear 1. Swear to something you know is untrue. This is broader than perjury (see that word), but not as serious. 2. Formally deny or deny under oath.

Forthwith An unnecessarily formal word meaning “immediately” or “as soon as possible.”

Fortiori (Latin) See a fortiori.

Fortuitous Happening by chance or accident; unexpected; unforeseen; unavoidable; not the same as “lucky.”

Fortune 500 A ranked list of the 500 largest U.S. industrial corporations.

Forum (Latin) A court. For example, forum domicilii is a court in the place where a person lives, and forum rei is a court where either the thing involved with the suit is or where the defendant lives.

Forum non conveniens (Latin) “Inconvenient court.” If two or more courts both have proper venue (see that word) for a case, a judge may

Fourteenth Amendment 205

rule that a lawsuit must be brought in the other court for either the convenience of or fairness to the parties.

Forum shopping Choosing the one court, among two or more that may legally handle a lawsuit, that you think may look most favorably at your side.

Forward 1. Set a rate (such as an interest or exchange rate) today for a future transaction. 2. Send on. For example, a forwarding fee is money paid to a lawyer who refers a client to another lawyer. The money is paid by the lawyer who receives the client. Some forms of this type of arrangement are unethical.

Forward contract See futures.

Foster child A child living with, cared for, and under the control of someone other than his or her own parents, but not adopted by this other person. A foster home is a home for children without parents or who have been taken away from parents by a court.

Foul bill A bill of lading that says that the goods are damaged or partly missing.

Foundation 1. Basis. For example, the foundation of a trial is the group of issues in dispute between the sides (as set out in the pleadings). 2. The preliminary questions to a witness that establish the admissibility (legal usability) of that person’s testimony (or of other things) as evidence in a trial are called “laying the foundation.” 3. An organization funded by will, by trust, or by contributions and set up to give money to charitable, educational, and other nonprofit organizations and projects. However, any organization may legally call itself a “foundation” without meeting the actual definition, and a “private foundation,” according to the I.R.S., is one that does not meet several technical requirements for the most favorable charitable organization tax treatment.

Four corners Same as face (see that word) of a document; that is, the document itself without outside information about it.

Four corners rule 1. The principle that the meaning of an unambiguous document should be determined from the document alone, not, for example, from oral testimony about what the writer “really” meant. 2. The general rule that the meaning of a phrase should be interpreted in the context of the entire document, not from the phrase in isolation.

Fourteenth Amendment The U.S. constitutional amendment that forbids the states from enforcing laws that “abridge the privileges and immunities” of U.S. citizens, forbids the states from depriving any

206 Fourth Amendment

person of due process or equal protection of law, and changes the apportionment of congressional representatives.

Fourth Amendment The U.S. constitutional amendment that forbids unreasonable searches and seizures and requires probable cause for search warrants.

Frame 1. Popular word for incriminating someone on false evidence. 2. Draw up; put into words. For example, to frame a complaint is to choose the legal form it will take, fit the facts to the form, and choose the actual wording.

Franchise 1. A business arrangement in which a person buys the right to sell, rent, etc., the products or services of a company and use the company’s name to do business. The person who buys the rights is a franchisee, and the person who sells the rights is a franchisor. 2. A special right given by the government, such as the right to vote or to form a corporation. 3. A sports team granted a particular territory by the league. [pronounce: fran-chize]

Franchise tax A tax on the right of a company to do business. It may be based on a fixed fee, on the amount of business done, on assets, etc.

Frank 1. The right, primarily of the federal government, to mail things without charge. Also called a franking privilege. 2. An old English word for free. For example, a frank-pledge was the responsibility of all free persons (the community as a whole) for the good conduct of each adult in the community.

Fraternal benefit association A group of persons, often in the same line of work, who band together for such things as group insurance coverage.

Fraud Any kind of trickery used to cheat another of money or property. See, for example, tax fraud. [pronounce: frawd]

Fraud on the market theory The principle that if a broker, stock issuer, or company gives out false information about the company that probably changed the value of the company’s stock, and if a person loses money by relying on that stock price to buy or sell the stock, the person was cheated by the information-giver even if the person did not rely on the false information itself. See also efficient market.

Fraud order A decision by the postmaster general to deny a person the use of the mail. This is done to prevent the person from continuing to obtain money fraudulently.

Frauds, statute of See statute of frauds.

Fraudulent Cheating. For example, a fraudulent conveyance is a debtor’s transfer of property to someone else in order to cheat a creditor who might have a right to it.

Freedom of Information Act 207

Freddie Mac See F.H.L.M.C.

Free agency The right of some veteran professional athletes to play for any team that wants them.

Free and clear With clear title (unrestricted, doubt-free legal ownership) to property with no encumbrances (liens, mortgages, etc.).

Free and equal election Free means that each person has a reasonable chance to qualify as a voter and, once qualified, a reasonable chance to vote without coercion of any kind. Equal means that each voter has the same rights as any other voter to have his or her vote count equally in the election.

Free exercise clause That part of the First Amendment to the U.S. Constitution that states, “Congress shall make no law . . . prohibiting the free exercise [of religion].” See freedom of religion.

Free on board See F.O.B.

Free port An area of a country (usually of a marine port, but sometimes a railroad crossover, airport, etc.) set aside for bringing in and selling foreign goods without paying import taxes. See also foreign trade zone.

Free ride Popular phrase for a riskless action that may result in a profit or for getting the benefit of union representation without having to join the union or pay dues.

Free speech See freedom of speech.

Free trade zone Foreign trade zone.

Freedom of association (or assembly) The First Amendment right to gather together in groups for any lawful purpose.

Freedom of choice Among other general meanings, the right to attend the school of your choice within a school district so long as there is no de jure segregation. This “right” often produces de facto segregation.

Freedom of contract The constitutionally protected right to make and enforce contracts, as limited only by reasonable laws about health, safety, and consumer protection.

Freedom of expression The First Amendment freedoms of religion, speech, and press combined.

Freedom of Information Act (5 U.S.C. 552) A 1966 federal law that makes all records held by the federal government, except for certain specific types of records (such as certain military secrets), available to the public. Procedures are set up to get these records and to appeal decisions to withhold them, but these procedures are often slow and cumbersome.