Glossary

Abstract of title
A traditional method of deducing title used in unregistered conveyancing. Although rarely used now in practice, an abstract will summarise all dealings with the property interest, beginning with the root of title. It will also mention whether documents have been stamped and executed, although it is up to the person investigating title to check that the stamping is sufficient and the execution appropriate.

Accelerated receipt
A percentage reduction in the amount of compensation paid to an individual on termination of employment to reflect the fact that payment is received in one lump sum rather than over the whole notice period. The amount of the percentage reduction is commonly 50% of the current annual interest rate or half of the annual official court interest rate.

Account of profits
An equitable remedy often used where the parties are in a fiduciary relationship. The purpose of this remedy is to require one party to surrender the profits made. It may also be available as an alternative action for money had and received where one person has profited from a wrong at the expense of another (and the claimant has suffered no actual loss) or in exceptional cases where other normal remedies provide inadequate.

Accumulated income
Trust income that the trustees have decided to add to the capital of the trust, rather than to pay out to (or for the benefit of) any of the beneficiaries of the trust.

Accumulation period
The period during which the trustees of a trust may accumulate the trust income (that is, add it to the trust capital, rather than pay it out to or for the benefit of the beneficiaries (see accumulated income)). After the accumulation period has ended, the trustees are obliged to distribute trust income to, or for the benefit of, the beneficiaries (unless they have a power to accumulate income for minor beneficiaries under section 31 of the Trustee Act 1925).

Action for an agreed sum
Also known as action for the price. A debt action under which the rules on remoteness and causation are irrelevant. The claimant need only prove that the debt is due.

Additional award
Compensation which may be payable to an employee if an employer does not comply with a reinstatement or re-engagement order made by an employment tribunal under ERA 1996. If ordered, an additional award would normally be in addition to the basic award and compensatory award and will be between 26 and 52 weeks’ pay, subject to current statutory limits.

Ademption (of legacies)
A specific legacy in a will fails to take effect (adeems) if the testator no longer owns that particular asset when he dies.

Advance
See advancement.

Advancement
Used in the context of trusts to mean:
• Setting a beneficiary up in life (or taking a step towards setting him up), for example, by paying for his professional training or providing start-up funding for his business.
• Using trust capital to benefit a beneficiary, for example, by advancing money to him or making a settled advance.
Both meanings come into play when trustees exercise a power of advancement. The trustees are then advancing capital (in the second sense given above) for a beneficiary’s advancement (in the first sense given above) or benefit. See also appointment.

Affidavit
A written statement of evidence which is sworn before a person authorised to administer affidavits, such as a solicitor. Affidavits take a similar form to witness statements but they include a jurat instead of a statement of truth. Before the introduction of the Civil Procedure Rules (CPR), affidavits were the principal means by which evidence was put before the court in interim applications. However, witness statements have generally taken their place now, except in some limited circumstances where affidavits must still be used.

Aggravated damages
Damages to provide compensation for mental distress or injury to feelings caused by the manner or motive with which a wrong was committed or by the defendant’s conduct subsequent to the wrong.

Agreed purchase price
The purchase price agreed between the parties in a contract for the sale of goods or property, subject to any adjustments provided for in the contract.

Agreement for lease
A contract under which a landlord agrees to grant, and a tenant agrees to accept, a lease in the future, on the terms set out in the agreement.

Alienation
The transfer of property to another. In landlord and tenant law, it usually refers to the tenant’s ability to assign the lease, underlet or part with possession of the premises.

All monies charge
A security that secures all monies owed by the borrower to the lender, not just the specific loan.

Alternative dispute resolution (ADR)
Methods of resolving disputes other than through the courts, including mediation, arbitration and expert determination.

Ambiguity
Where the wording of a contract or document can be interpreted in more than one way, leading to uncertainty.

Amortisation
The gradual reduction of a debt or intangible asset’s value through periodic payments or charges.

Ancillary relief
Financial orders made in divorce proceedings, such as maintenance, lump sum payments, transfer of property or pension sharing.

Annual value
A notional yearly rental value formerly used to assess property taxes.

Annuitant
A person entitled to receive an annuity.

Annuity
A fixed sum of money paid annually to someone, often for life.

Anticipatory breach
When one party indicates, before the time of performance, that they will not perform their contractual obligations.

Appointee
A person appointed to act on behalf of another, for example, to receive state benefits for someone incapable of managing their affairs.

Appointment
In trust law, the exercise of a power by trustees to transfer property or confer benefits on beneficiaries.

Appurtenance
Something that belongs to or is attached to a property, such as a right of way.

Arbitration
A method of resolving disputes outside the courts, where the parties agree to be bound by the decision of an arbitrator.

Arrears
Money owed that is overdue, such as unpaid rent or mortgage instalments.

Articles of association
The document that sets out the internal regulations and governance of a company.

Assent
A formal document used by personal representatives to transfer property to beneficiaries under a will or intestacy.

Assets
Property of any kind owned by a person or company, including tangible and intangible items.

Assignment
The transfer of legal rights or property from one person to another, such as the assignment of a lease.

Assurance
A term often used in relation to the transfer of land or property, historically referring to deeds.

Attestation
The act of witnessing the signing of a document and signing it oneself to confirm this.

Authorised guarantee agreement (AGA)
An agreement under which an outgoing tenant guarantees the performance of the incoming tenant’s obligations under a lease.

Authority
The legal power or right to give orders, make decisions, and enforce obedience; may also refer to a precedent or source of law.

Damages
A sum of money awarded by a court as compensation for loss or injury caused by another’s breach of duty or contract.

Debenture
A document issued by a company acknowledging a debt and often creating security over the company’s assets.

Debtor
A person or company that owes money to another.

Decree absolute
The final order in divorce proceedings that legally ends the marriage.

Decree nisi
A provisional order in divorce proceedings which becomes absolute unless contested within a set time.

Deed
A formal legal document that is signed, witnessed and delivered, often used for property transactions or powers of attorney.

Default
Failure to fulfil a legal obligation, such as failing to repay a loan.

Defendant
The person or party against whom legal proceedings are brought.

Delegated legislation
Law made by an authority under powers given by an Act of Parliament, such as statutory instruments.

Demise
A grant of an estate in land, usually by lease.

Deposit
A sum paid as security for performance of a contract, typically part of the purchase price in property transactions.

Dilapidations
Repairs required during or at the end of a lease to restore a property to the condition required by the lease.

Disbursement
Money spent by a solicitor on behalf of a client, such as court fees or search fees.

Discharge
The release from an obligation, such as repayment of a debt or completion of a contract.

Disclosure
The process of making relevant documents available to the other party in litigation.

Discontinuance
The withdrawal of legal proceedings by the claimant.

Discretionary trust
A trust where trustees have the power to decide which beneficiaries receive income or capital and in what amounts.

Dismissal
The termination of an employee’s contract by their employer.

Disposition
A legal act that transfers an interest in property.

Dissolution
The legal ending of a partnership or marriage.

Distribution
The division of assets among beneficiaries, partners or shareholders.

Dividend
A payment made by a company to its shareholders out of profits.

Domicile
The country which a person treats as their permanent home, and with which they have the closest ties.

Donee
A person who receives a gift or who is appointed under a power of attorney.

Donor
A person who makes a gift or grants a power of attorney.

Easement
A right enjoyed by one landowner over the land of another, such as a right of way.

Encumbrance
A claim, lien, charge or liability attached to property that may affect its transfer or value.

Endorsement
A note on a legal document recording an amendment, signature or instruction.

Engrossment
The final version of a legal document prepared for execution.

Equitable interest
An interest in property recognised by equity, for example, the interest of a beneficiary under a trust.

Equity
The system of law developed to mitigate the strictness of common law, based on principles of fairness.

Escrow
A deed or money held by a third party to be delivered once certain conditions are met.

Escheat
The reversion of property to the Crown when a person dies without heirs and without disposing of their property.

Estoppel
A principle preventing someone from going back on a promise or representation when it would be unfair to do so.

Executor
A person appointed in a will to administer the estate of the deceased.

Exemplification
An official copy of a court document sealed by the court.

Ex gratia payment
A payment made voluntarily without admission of liability or obligation.

Ex parte
An application made to the court by one party without notice to the other.

Exclusion clause
A term in a contract which seeks to restrict or exclude liability for certain breaches.

Exemplary damages
Damages intended to punish the defendant rather than compensate the claimant.

Express trust
A trust deliberately created by the settlor, usually in writing.

Fee simple
The greatest interest in land possible, equivalent to absolute ownership.

Fiduciary duty
A duty to act in good faith and in the best interests of another, such as a trustee’s duty to beneficiaries.

Fixtures
Items attached to land or a building that become part of the property.

Force majeure
A contractual clause excusing performance due to events beyond the parties’ control.

Forfeiture
The loss of property or rights as a penalty for breach of obligation.

Freehold
Ownership of land or property for an unlimited time.

Frustration
The ending of a contract because an unforeseen event makes performance impossible or radically different.

Gazumping
When a seller accepts a higher offer from another buyer after already agreeing a sale, but before exchange of contracts.

Gazundering
When a buyer lowers their offer for a property just before contracts are exchanged.

Goodwill
The intangible value of a business’s reputation, customer base and ongoing operations.

Grant
A formal document that transfers an interest in land or gives rights, such as a lease or easement.

Grantee
The person who receives a grant of property or rights.

Grantor
The person who makes a grant of property or rights.

Guarantee
A promise to answer for the debt or obligation of another if they default.

Guarantor
The person giving a guarantee.

Harassment
Unwanted conduct that violates a person’s dignity or creates a hostile or intimidating environment.

Heads of terms
A document setting out the main points of a proposed agreement before the formal contract is drawn up.

Hereditament
Property that can be inherited.

Hire purchase
An arrangement where goods are hired with an option to purchase at the end of the term.

Holding company
A company that controls another company, usually by owning more than 50% of its shares.

Hotchpot
In trusts and estates, the process of bringing property previously given to a beneficiary into account before distributing the estate.

Implied term
A provision not expressly stated in a contract but implied by law, custom or conduct.

Injunction
A court order requiring someone to do or stop doing a particular act.

Insolvency
The inability to pay debts as they fall due, or when liabilities exceed assets.

Instrument
A formal legal document.

Intellectual property (IP)
Legal rights protecting creations of the mind, such as patents, trademarks, copyright and designs.

Intestacy
The situation when someone dies without a valid will.

Intestate
A person who dies without leaving a valid will.

Joint tenancy
A form of property ownership where two or more people own the whole together, with a right of survivorship.

Judgement
A court’s decision resolving a dispute.

Jurisdiction
The authority of a court to hear a case and make legal decisions.

Land Registry
The government department responsible for recording the ownership of land and property in England and Wales.

Landlord
The owner of property that is leased or rented to a tenant.

Lease
A contract granting the right to use property for a specified time in return for rent.

Leasehold
Property held under a lease for a fixed term, rather than owned outright.

Legacy
A gift of money or personal property left in a will.

Legislation
Laws enacted by Parliament, including Acts and statutory instruments.

Lessee
A tenant who holds property under a lease.

Lessor
The landlord who grants a lease.

Letter of intent
A document setting out a party’s provisional commitment to enter into a contract at a future date.

Lien
A right to keep possession of property until a debt is paid.

Liquidation
The process of winding up a company’s affairs and distributing its assets to creditors and shareholders.

Litigation
The process of taking legal action through the courts.

Loan agreement
A contract under which one party lends money to another, setting out the terms of repayment and interest.

Magistrates’ court
A lower court dealing with minor criminal cases, some civil matters and family proceedings.

Malfeasance
Wrongdoing or misconduct by a public official.

Mandate
An instruction or authorisation, often used in banking to authorise transactions.

Mediation
A method of alternative dispute resolution where an independent third party helps parties reach a voluntary settlement.

Memorandum of association
A legal statement signed by all initial shareholders or guarantors agreeing to form a company.

Merger
The combining of two or more companies into one.

Minor
A person under the age of 18.

Mitigation
Steps taken to reduce loss or damage, or the principle that a claimant must minimise their losses.

Mortgage
A loan secured against property.

Mortgagee
The lender in a mortgage, usually a bank or building society.

Mortgagor
The borrower in a mortgage, who offers their property as security.

Negligence
Failure to take reasonable care, resulting in damage or injury to another.

Negotiation
Discussion aimed at reaching an agreement.

Nominee
A person or company named to act on behalf of another, often in holding shares or property.

Novation
The replacement of one party to a contract with another, with the consent of all parties.

Notice
Formal communication of a fact or requirement, often in writing.

Notice to quit
A notice given by a landlord or tenant to terminate a tenancy.

Oath
A solemn promise to tell the truth, usually made in court or when swearing an affidavit.

Obligation
A legal duty to do or not do something.

Occupier’s consent
Consent given by a person living in a mortgaged property to acknowledge the lender’s rights.

Offer
A proposal to enter into a contract, which becomes binding once accepted.

Offeree
The person to whom an offer is made.

Offeror
The person who makes an offer.

Official receiver
An officer of the court who deals with bankruptcy and compulsory liquidation.

Option
A contractual right to buy or sell something in the future on agreed terms.

Order
A direction issued by a court.

Overriding interest
An interest in land that binds a purchaser even though not registered, such as certain rights of occupiers.

Partnership
A business carried on by two or more persons with a view to profit.

Passing off
A legal action protecting goodwill against misrepresentation, often relating to business names or branding.

Patent
A legal right giving an inventor exclusive rights to their invention for a period of time.

Payee
The person to whom money is paid.

Payor (or payer)
The person who makes a payment.

Penalty clause
A contractual term imposing a penalty for breach, generally unenforceable in English law.

Performance
Carrying out the obligations under a contract.

Perjury
Lying under oath.

Personal representative
A person appointed to administer the estate of someone who has died (executor or administrator).

Plaintiff
The former term for a claimant in civil proceedings.

Pleadings
Formal written statements of case exchanged in civil proceedings.

Possession
The physical control or occupation of property.

Power of attorney
A legal document authorising someone to act on another’s behalf.

Precedent
A legal principle established in earlier cases which is binding in later similar cases.

Pre-nuptial agreement
A contract entered into before marriage setting out how assets will be divided if the marriage ends.

Prima facie
Latin for “at first sight”; evidence that is sufficient unless disproved.

Priority
The order of importance or rank of legal rights.

Probate
The process of proving and registering a will.

Promissory note
A written promise to pay a specified sum of money.

Property
Anything that can be owned, whether real estate, personal possessions, or intangible rights.

Proprietor
The registered owner of property.

Quash
To set aside or annul a legal decision.

Quasi-contract
An obligation imposed by law to prevent unjust enrichment, even where no contract exists.

Quiet enjoyment
A tenant’s right to use premises without interference from the landlord.

Quorum
The minimum number of members required for a meeting to be valid.

Seal
A mark or stamp used to authenticate a document. Historically required for deeds, now largely replaced by signatures and formal wording.

Secured creditor
A creditor with security over a debtor’s property, such as a mortgagee.

Security
Property or rights given to ensure payment of a debt or performance of an obligation.

Service of process
The formal delivery of legal documents to a party to notify them of proceedings.

Set-off
The right to balance mutual debts between parties.

Settlor
A person who creates a trust by transferring property to trustees.

Share capital
The money invested in a company by its shareholders in return for shares.

Shareholder
An owner of shares in a company.

Specific performance
A court order requiring a party to carry out their contractual obligations.

Stamp duty
A tax payable on certain transactions, such as the transfer of property or shares.

Statement of case
Formal documents setting out the parties’ positions in civil litigation.

Statute
A law enacted by Parliament.

Statutory declaration
A written statement of fact declared true before an authorised witness.

Statutory instrument
A form of delegated legislation made under powers given by an Act of Parliament.

Sub-lease
A lease granted by a tenant out of their own leasehold interest.

Subrogation
The substitution of one person in place of another regarding a legal right or claim.

Subsidiary
A company controlled by another company, usually through share ownership.

Sue
To bring a legal action against someone in court.

Summons
An order requiring someone to attend court.

Tenancy
A right to occupy property granted by a landlord to a tenant, usually in return for rent.

Tenant
A person who occupies land or property under a lease or tenancy agreement.

Testamentary trust
A trust created by a will, taking effect after the testator’s death.

Testator
A person who makes a will.

Title deeds
Documents proving ownership of property.

Tort
A civil wrong, other than breach of contract, for which the court provides a remedy.

Trademark
A sign capable of distinguishing goods or services of one trader from those of others.

Transaction
An agreement or exchange between parties, such as a sale or contract.

Transfer
A document transferring ownership of property.

Transferee
The person to whom property is transferred.

Transferor
The person who transfers property to another.

Trespass
Unlawful entry onto land or interference with a person or property.

Trust
An arrangement where property is held by trustees for the benefit of beneficiaries.

Trustee
A person who holds and manages property under a trust for the benefit of others.

Ultra vires
Latin for “beyond the powers”; acts carried out beyond the legal authority of a person or body.

Undertaking
A formal promise to the court or another party, enforceable by law.

Unfair dismissal
Termination of employment without a fair reason or without following proper procedure.

Unilateral contract
A contract where one party promises something in return for the act of another, such as a reward.

Unjust enrichment
A legal principle requiring repayment when someone has been unfairly enriched at another’s expense.

Vacant possession
Property left empty of people and belongings, ready for the new owner or tenant.

Variation
A change to the terms of a contract or agreement.

Vendor
A person or company selling property or goods.

Vicarious liability
Legal responsibility imposed on one person for the acts of another, such as an employer for employees.

Void contract
An agreement with no legal effect from the outset.

Voidable contract
A valid contract that may be set aside by one of the parties, such as for misrepresentation.

Voluntary liquidation
A winding up of a company initiated by its shareholders or creditors.

Waiver
The voluntary giving up of a legal right.

Warrant
A legal document authorising an officer to take action, such as arrest or search.

Warranty
A contractual term, breach of which gives rise to a claim for damages but not the right to terminate the contract.

Will
A legal document by which a person directs how their estate is to be distributed after death.

Without prejudice
Words used in correspondence to show that statements are made in a genuine attempt to settle a dispute and may not be used in court.

Witness statement
A written statement signed by a person that sets out their evidence for court proceedings.

Writ
A formal written order issued by a court.