Daniel Oran - Oran's Dictionary of the Law

288 Lien creditor

Lien creditor See lien and secured creditor.

Lien state (or theory jurisdiction) A state in which a mortgage is considered a mere lien on property, with the result that the creditor who holds the mortgage cannot get title to the property until a foreclosure sale is completed. Compare with title theory state.

Lieu (French) “Place.” “In lieu of ” means “instead of.”

Lieutenant 1. A deputy, substitute, or second in command, such as a lieutenant governor. 2. A military or police middle rank; closer to the bottom than the top in the military, about the middle for the police.

Life 1. Human life begins at different times for different legal purposes.

It may begin at conception, at the time when a child is capable of living outside the womb, at the moment of birth and first breath, etc. For definitions of the end of life, see death. 2. Life is also short for “for life” or “for the duration of life.” For example, a life estate, interest, or tenancy lasts until a named person or persons die. And a life annuity is a type of insurance or pension plan (see that word) that pays from a certain point until the end of the person’s life.

Life care contract An agreement (usually between an elderly person and a nursing home) in which the person turns over all property in return for all support from then on.

Life estate (or interest or tenancy) An ownership interest in property (an estate) that lasts until a named person or persons die.

Life expectancy The length of time a person of a given age, sex (and sometimes health) is expected to live. This is computed from life (or actuarial) tables, sometimes adjusted for individual health-related history and characteristics, and used in figuring insurance rates, damages for injuries, etc.

Life in being The lifetime of a specific person already born, or the lifetime of a person who will be alive when a deed or will takes effect. A life in being is used in the calculations used in the rule against perpetuities (see perpetuity).

Lift Remove an obstacle or obligation. Stop the effect of something, such as a court order.

Like-kind exchange A trade of ownership of certain property by one person for property of the same type owned by another person. With certain exceptions and limitations, a gain or loss on the trade is not recognized (see recognition) as a currently taxable event.

Limine (Latin) See in limine.

Limit order See order.

Limited liability partnership 289

Limitation 1. A restriction. 2. A time limit. For example, a statute of limitations is a law that sets a maximum amount of time after something happens for it to be taken to court, such as a “three-year statute” for lawsuits based on a contract, or a “six-year statute” for a criminal prosecution. (A distinction is sometimes made between a statute of limitations, which ends the remedy of going to court, and a statute of repose, which ends the underlying right or cause of action.) 3. See limited.

Limited 1. Partial or restricted. For example, limited liability is the legal rule that the owners (shareholders) of a corporation cannot usually be held accountable for corporate actions or losses and, thus, the most they can usually lose is the value of their investment. But see piercing the corporate veil. The limited partners but not the general partners of a limited partnership also have limited liability. See also limited liability company and limited liability partnership. 2. “Limited ” is the British and Canadian word for “incorporated.” It is abbreviated “Ltd.” 3. A previously decided case is said to be limited by a subsequent case if the court in the subsequent case reduces the scope or applicability of a rule of law (without overruling it) established in the previous case. 4. For other examples, see the words following.

Limited admissibility The principle that a judge may allow evidence to be used for one purpose in a trial, but not another. If it is a jury trial, the judge should instruct the jury carefully about what the evidence may and may not prove and how the jurors may consider it.

Limited divorce See separation. Limited fee simple See fee simple.

Limited liability company A cross between a partnership and a corporation (see those words) owned by members who may manage the company directly or delegate to officers or managers who are similar to a corporation’s directors. Governing documents are usually a publicly filed articles of organization and a private operating agreement. Members are not usually liable for company debts, and company income and losses are usually divided among and taxed to the members individually according to share.

Limited liability partnership A partnership (see that word) in which the partners have less than full liability for the actions of other partners, but full liability for their own actions. In a limited liability limited partnership, the general partners have less than full liability for the actions of other general partners.

290 Limited partnership

Limited partnership A partnership (see that word) formed by general partners (who run the business and have liability for all partnership debts) and limited partners (who partly or fully finance the business, take no part in running it, and have no liability for partnership debts beyond the money they put in or promise to put in). See also limited liability partnership and limited partnership association.

Limited partnership association A business organization with many of the characteristics of a limited liability company (see that word) and the restriction of membership to persons elected by current members.

Limited publication Communication of a work to a few people. This is not a dedication of the work to the public that results in a loss of the work’s copyright.

Limited trust A trust set up for a specific time period.

Line item veto See veto.

Line of credit The promise to lend money up to a certain maximum that a merchant or bank will give to a customer, usually for an ongoing series of transactions.

Line of descent A direct line of descent includes grandparents, parents, children, etc., and a collateral line of descent includes brothers, aunts, nieces, etc.

Line of duty Acts performed by military or law enforcement officers to carry out their assigned tasks.

Lineal In a line. For example, lineal relationships are those of father and son, grandson and grandmother, etc. [pronounce: lin-ee-al]

Lineup A group of persons, placed side-by-side in a line, shown to a witness of a crime to see if the witness will identify the person suspected of committing the crime. A lineup should not be staged so that it is suggestive of one person.

Link financing The process by which one person deposits a compensating balance in a bank to help another person get a loan.

Link-in-chain Describes the principle that the constitutional privilege against self-incrimination (see that word) includes protection against questions that could lead even indirectly to a linking of the person and criminal activity.

Liquid 1. Having enough money to carry on normal business. 2. Easily turned into cash.

Liquidate 1. Pay off or settle a debt. 2. Adjust or settle the amount of a debt. 3. Settle up affairs and distribute money, such as the money left by a dead person or by a company that goes out of business.

Literary work 291

Liquidated 1. Paid or settled up. 2. Determined, settled, or fixed. For example, a “liquidated claim” is a claim or debt with a definite amount fixed either by agreement or by a court’s action, and liquidated damages is a specific amount of money agreed to in a contract as compensation for a breach of that contract. Contrast penalty clause. 3. Sold for cash. The assets of a dead company may be liquidated (to pay creditors, owners, etc.).

Liquidation 1. See liquidate. 2. Winding up (see wind up) a company’s affairs in order to end its existence.

Liquidity 1. See liquid. 2. The ability to turn assets easily into cash.

Lis pendens (Latin) 1. A pending lawsuit. 2. A warning notice that title to property is in litigation and that anyone who buys the property gets it with legal “strings attached.”

List 1. See listing. 2. See docket. 3. List price is a suggested retail price of goods set by the manufacturer. It may be reduced for many reasons.

Listed security A stock (or other security) that has met the requirements of a stock exchange (financial reports, supervision, etc.) and is traded on that exchange.

Listing 1. A real estate agent’s right to sell land. An open (or general) listing is the right to sell that may be given to more than one agent at a time. An exclusive agency listing is the right of one agent to be the only one other than the owner who may sell the property during a period of time. An exclusive (authorization to sell) listing is a written contract that gives one agent the sole right to sell the property during a time period. This means that even if the owner finds the buyer, the agent will get a commission. Multiple listing occurs when an agent with an exclusive (or exclusive agency) listing shares information about the property (and its availability for sale) with many members of a real estate association and agrees to share the commission with an agent who finds the buyer. And, a net listing is an arrangement in which the seller sets a minimum price he or she will take for the property, and the agent’s commission is the amount the property sells for over that minimum selling price. 2. See listed security.

Literacy test A reading test that must be passed to vote. Most state literacy tests have been ended by the Federal Voting Rights Act.

Literal construction See interpretation definition no. 1.

Literary property 1. A written work, such as a novel or screenplay, protected by copyright. 2. Ownership rights in a literary work.

Literary work Under copyright law, any work (except audiovisual) expressed in words, numbers, or symbols, regardless of its physical form (books, manuscripts, tapes, etc.).

292 Litigant

Litigant A plaintiff or defendant in a lawsuit.

Litigate 1. Actively carry on a lawsuit. 2. Carry on the trial part of a lawsuit.

Litigation A lawsuit or series of lawsuits.

Litigious 1. Prone to bringing lawsuits; bringing too many lawsuits. 2. Disputable; subject to disagreement. [pronounce: le-tij-es]

Littoral Having to do with a shore, bank, or side of a body of water.

Live storage The temporary parking of a car in a garage.

Livery An old word for the formal transfer and either actual or symbolic delivery of something (especially land).

Living trust A trust that will take effect while the person setting it up is still alive, as opposed to one created under a will upon death.

Living will An advance directive by which you authorize your possible future removal from an artificial life support system.

Lloyd’s of London The world’s largest association of insurance underwriters (persons and companies that insure things).

Load 1. That part of insurance, mutual fund, or other business charges that represents commissions and selling costs. 2. An unreasonable additional charge.

Loadstar method See lodestar method.

Loan commitment A promise by a bank, mortgage company, etc., to lend someone a certain amount of money at a certain rate of interest for a certain length of time. A loan commitment to finance a real estate purchase will usually be held open long enough to give the buyer time to complete the purchase and provides that the property purchased will be collateral for repayment of the loan.

Loan for consumption A loan such as a cup of sugar that gets returned as a different cup of sugar. See loan for use.

Loan for use A loan such as a lawnmower that gets returned as exactly the same lawnmower. See loan for consumption.

Loan ratio (or loan-to-value ratio) A comparison of the amount of a loan to either the market value of the property on which the loan is made or to the property’s purchase price. The use of one “ratio” phrase or the other is imprecise, so look for the specification of market value or purchase price.

Loan shark A person who lends money at an interest rate higher than the legal maximum or who uses extortion to force repayment.

Loan value The highest amount a lender will lend (or can safely lend) on a piece of property, on a life insurance policy, etc.

Locked in 293

Loaned servant doctrine The legal principle that in most cases when an employer lends a person to another employer, that person becomes an employee of the second employer for many purposes, such as liability to others.

Lobbying Attempting to persuade a legislator to vote a certain way on a bill or to introduce or change a bill.

Lobbying acts Federal and state laws requiring the registration of lobbyists, the reporting of money spent by lobbyists, and other things. See also foreign agent.

Local action A lawsuit that may be brought in only one place. Compare with transitory action.

Local agent A person who takes care of a company’s business in a particular area. Many states require a company doing business in the state to register a local agent for the service of process for lawsuits against the company.

Local assessment (or local improvement assessment) A tax on only those properties benefiting from an improvement such as a sidewalk or sewer.

Local court A vague term meaning a municipal court, a particular foreign court, a state rather than a federal court, etc.

Local law A vague term for a law that operates only in one geographic area, that affects only one type or group of persons or things, that operates “here” rather than “there,” etc.

Local option 1. The choice given to a city, county, etc., under state law to choose whether to allow such things as the sale of alcoholic beverages, the existence of racetracks, etc. 2. Home rule.

Location Taking actions to make a claim for the mineral rights to land. There are detailed requirements that can include posting of signs to give notice of the claim and marking the boundaries on which the claim is made.

Locative calls The description of land in a deed or other document by using landmarks, physical objects, and other things by which the land can be precisely located and identified.

Lockbox system First a company’s customers send payments to a local post office box, then a local bank collects the payments and sends them on to the company’s main bank. This is a common form of concentration banking, in which local payments feed into local banks for transfer.

Locked in 1. Describes someone who has profits on stocks or other securities that will require a high tax payment if the stocks are sold now.

294 Lockout

2. Describes someone who has an option to purchase something at a certain price even if the price goes up, or who has a mortgageapplication interest rate guaranteed for a specific time period.

Lockout An employer’s refusal to allow employees to work. This is not an individual matter between an employer and a single employee, but a tactic in employer-union disputes.

Lockup A place of detention in a police station or courthouse.

Loco parentis See in loco parentis.

Locus (Latin) 1. Place. For example, locus contractus (the place where the contract was made); locus criminis or delicti (the place where the crime was committed); locus regit actum (the place where the act is done); etc. See lex loci for more examples. 2. Locus sigilii is “the place of the seal.” See L.S. 3. Locus poenitentiae is the “place of repentance,” a final chance to change your mind before making a deal or committing a crime.

Lodestar method 1. Calculating the award of attorney’s fees in a case by multiplying the reasonable hours spent (which may be less than the actual hours) by the reasonable hourly rate (which may be less than the requested rate). 2. Any statutory attorney’s fees calculated by what is reasonable, rather than by what is claimed.

Lodger A person who pays to live in a part of a dwelling managed by another and who does not have total control over the rooms lived in.

Log rolling 1. Including many different things in one legislative bill to get many different people to vote for it, thus voting for things they might have voted against if the things were separate. 2. Legislative fa- vor-trading in general.

Logging in Recording the names of persons as they are brought to a police station. The logging in process may be combined with booking (see that word).

Loitering Hanging around with no apparent purpose. Many anti-loitering laws are unconstitutional.

Long (or long position) A person who has large amounts of stock or who has contracted to buy large amounts of a stock for future delivery in expectation of a price rise is called long and has a long position.

Long-arm statute A state law that allows the courts of that state to claim jurisdiction over (decide cases directly involving) persons outside the state who have allegedly committed torts or other wrongs inside the state. Even with a long-arm statute, the court will not have jurisdiction unless the person sued has certain minimum contacts with the state.

Lost volume seller 295

Loophole A technical way to avoid the intent or main thrust of a law or contract, such as legally avoiding taxes by taking advantage of an ambiguity or omission in the tax laws.

Looseleaf service A set of books in looseleaf binders that gives up-to- the-minute reports on one area of law, such as federal taxes. As the law changes, new pages replace old ones. Three big publishers of these are Prentice-Hall, Commerce Clearing House, and Bureau of National Affairs.

Lord Campbell’s Act 1. Shorthand name for a law that sets the maximum amount that can be recovered in a wrongful death action (see that word). 2. The first law that allowed truth published for the public benefit to be a defense to libel.

Lord Mansfield’s Rule The principle, used in some states, that neither spouse may testify about the husband’s access to the wife at the time a child was conceived.

Loss A broad word that can mean anything from total loss (dropping a coin in the ocean accidentally) through partial loss (a drop in the value of a stock) to technical loss (“loss of an eye” might mean “not able to see well enough to work”). In general, the legal use of the word is close to its ordinary use. For various types of loss, such as casualty, general average, hobby, etc., see those words.

Loss leader Merchandise sold below cost to attract customers who may buy other items. When this is advertised with no intention of selling the promised items, it may be bait and switch.

Loss of bargain rule Benefit of bargain rule.

Loss payable clause 1. A provision in an insurance policy that lists the order of payments if the insurance is insufficient to pay everyone involved. 2. A provision in an insurance policy that permits payment to someone other than the person named as the policy owner.

Loss ratio The proportion of insurance premiums collected to loss claims paid.

Lost grant doctrine The principle that if a person holds land as the owner and the previous owner knew about it for a long time, then it is assumed that there must have been a document transferring ownership even if it cannot be found.

Lost volume seller A seller who has goods because a buyer has broken a contract to buy them, and who then sells the goods to a second buyer who would have otherwise given the seller additional sales volume by buying identical goods. The seller may collect lost profits from the first buyer.

296 Lost will

Lost will A will, known to have been executed (see execute), but that cannot be found after the testator’s death. In some states, the content of a lost will can be proved by evidence about it. In some states, the fact that there is a lost will creates a rebuttable presumption that the will was revoked and is void.

Lot 1. An individual piece of land. 2. A thing or group of things that is part of one separate sale or delivery. 3. One sale of stock or other security. See odd lot and round lot.

Louisiana Law Law based primarily on the French Code Civil rather than British common law.

Love and affection See consideration. Low docs See no docs.

Loyalty oath A pledge of allegiance required of many public employees, mostly of those in jobs having access to secrets. If the oath is vague or requires swearing to things in a way that violates a person’s civil rights, it is usually unconstitutional.

Ltd. Limited.

Lucid interval A period of “temporary sanity” or clearheadedness, during which an insane or mentally infirm person can lawfully marry, write a valid will, or enter into binding contracts.

Lucrative title An old phrase for rights to property received by gift or inheritance.

Lucri causa (Latin) In order to gain or profit; profit motive. Lump-sum settlement 1. Payment of an entire amount of owed money

at one time, rather than in installments. Such settlement may be for less than the entire amount owed or in dispute. 2. Payment of a fixed amount of money to take care of an obligation that might otherwise have gone on forever. For example, “lump-sum alimony ” might be a payment of one large sum to avoid having to pay a changeable, potentially greater, amount of money on a regular basis for a long time.

Lunacy See insanity.

Luxury tax A tax on things considered unnecessary, such as jewelry over a certain price, cigarettes, or liquor. A luxury tax is a type of excise.

Lying by Describes a person who remains silent during a transaction that affects his or her interests. The right to protest the transaction may be forfeited if the person’s lying by indicates acquiescence to the transaction. See also estoppel.

Lynch law Illegal actions by persons who claim to take the law into their own hands to punish someone, usually by death.