Glossary Of Terms Used In Contracts, Business Law, Commercial Litigation, Real Estate Law, Estates & Accident Cases
Important Note in Using this Glossary
The definitions provided in this glossary were prepared by Michael W. Goldstein, a New York Lawyer. These definitions are based upon principles of New York Sate law which are current as of the date this page was written. For legal matters outside of New York State, such as those involving contracts, commercial law, commercial litigation, wills, trusts or estates, as well as accidents occurring outside of New York State, or any other lawsuit or legal matter outside of New York State, the laws of other states will apply, and therefore, the definitions in this glossary may not be applicable.
New York Business Law, Real Estate Law, and Probate Law Glossary
Administering the Estate
If the person who died (“decedent”) had no Will, the process of collecting and distributing the estate’s assets is referred to as administering the estate.
Asset Sale of a Business
The bulk sale of all the assets of a business (compare to “stock sale of a business”)
Attorney-in-Fact (“Agent”)
The person designated to act in place of the principal or donor under a power of attorney
Codicil
Document that modifies an existing Will. In New York State, a Codicil must be executed in accordance with the statutory requirements and formalities of a Will.
Confidentiality Agreement
Agreement between two or more parties which provides that they will not disclose any confidential information obtained from the other party in the course of their business dealings.
Confidentiality and Non-Compete Agreements, also referred to as Non-Competition and Non-Disclosure Agreements (NCND)
Agreement that combines the provisions of a Confidentiality Agreement and a Non-Compete Agreement
Corporation
A legal entity that issues shares of stock to its owners, and has authority to act in the its own name. A corporation can sue or be sued it its own name. New York corporations have names that end in Corp., Inc., or Ltd. The stockholders of a corporation have limited liability, which means that they are not personally liable for the corporation’s debts.
Corporations (other than “sub-chapter S corporations”) are subject to double taxation. This means that the corporation’s profits are taxed at the corporate income tax rates, and its shareholders are also taxed at their own rates on distributions of profits (dividends) received by each shareholder.
A business corporation issues shares of stock to its stockholders, as evidence of their ownership interest in the corporation. Corporation shareholders elect a board of directors to manage the business. The board of directors also adopts bylaws, and elects the officers. Annual meetings are required of both the shareholders and the board of directors. Non-profit (not-for-profit) corporations may be established for religious, educational, charitable or public service purposes. Non-profit corporations do not issues shares of stock because there are no stockholders or owners of a non-profit corporation.
Durable Power of Attorney
Power of Attorney that remains in effect even if the person who signs the Power of Attorney becomes mentally or physically incapacitated.
Employee
A person hired to work for another person or business for aa salary or other compensation. The employer usually has the authority to direct the manner in which the work is performed, the location where it is performed, and the time when it is performed. The employer’s level of control is an important factor in distinguishing an employee from an independent contractor.
Health Care Proxy
Document that designates a trusted relative, friend, etc. to make health care decisions for you.
Independent Contractor
A person or business performing services for a fee, for another person or business, pursuant to an oral or written agreement. The relationship of the independent contractor and the person or business for whom the services are performed is distinguishable from the traditional employment relationship. Unlike an employee, the independent contractor is not subject to the direction and supervision of the person or business for whom the services are performed. The independent contractor usually has the right to control the manner of the work, time of work, location where the work is performed, and the methods utilized to accomplish the work. The independent contractor is also free to perform work for many people or businesses.
An independent contractor is legally responsible to pay his or her own income taxes, Social Security Tax, etc.,since there are no payroll deductions. The independent contractor does not enjoy the fringe benefits that employees regularly receive; such as sick leave, vacation pay, health insurance, retirement benefits, or workers compensation coverage. The Internal Revenue Service is suspicious of independent contractor agreements which might serve to disguise an employer-employee relationship.
Injunction
A court order requiring the person to whom it is directed to perform a particular act or to refrain from performing a particular act.
Intestacy
The laws of intestacy provide for distribution of the assets of someone who dies without a valid Will
Intestate
A person who dies without a valid Will
Joint Venture
A business agreement between two or more parties who agree to work together and share responsibility to achieve a desired result. The parties may also agree to share control, resources, work, profits and losses.
Last Will & Testament (Will)
Directs how your property will be distributed when you die. The Will should also identify the executor, who will follow your instructions regarding managing and distributing your assets after you die. In addition, a Will may also designate a guardian to take care of your minor children
License Agreement
A written contract whereby the licensor who owns a copyright, patent, trademark, or other intellectual property, charges a royalty or fee to permit the other party to use that intellectual property, or to sell copies or sell products containing the licensed intellectual property. The licensor retains ownership of the intellectual property, but the licensee is permitted to make use of it for a specific period of time, or for specific terms of use. Also, in some circumstances, an agreement permitting the limited use of a portion of property might take the form of a license agreement.
Limited Liability Company (LLC)
An unincorporated business that affords limited liability to its owners. Therefore, the members of the LLC are not personally liable for the debts of the company. The members of the LLC may elect for the LLC to be treated as a partnership or “disregarded entity” for income tax purposes, which thereby avoids the double taxation of a corporation.
Limited Liability Company Operating Agreement
Agreement that defines the rights and responsibilities of each of the LLC’s member’s relating top the LLC’s management, as well as capital accounts, membership interests, distributions of profits, capital contributions and capital accounts, transfer of membership interest, etc.. The LLC’s Operating Agreement may includes terms similar to those contained in a corporation’s by-laws, as well as a corporation’s shareholders’ agreement.. In New York State, an LLC is required to have an Operating Agreement, even for single member LLC’s.
Limited Liability Partnership
A business entity where only the general partner has the right to control and manage the business. The general partner remains liable for the partnership’s debts, while the limited partners are protected by limited liability.
Living Will
Document that expresses your wishes regarding your medical treatment, in the event that you become mentally or physically incapacitated.
Non-Compete Agreement
An agreement not to engage in certain defined businesses or employment activities that may be in competition with the others party’s business, for a specified period of time, and in a designated location or geographic area.
Partnership
A business entity where the partners are personally liable for the partnership’s debts. The partners share income and expenses in proportion to their ownership interest in the partnership. There is no double taxation for a partnership, since the partnership does not pay income tax. Instead, each partner’s share of the partnership’s profits or losses is reported on their respective personal income tax returns.
Partnership Agreement
An agreement among the partners which provides for the management powers and duties of each partner; term (length) of the partnership; termination of the partnership, percentages of ownership of the partners, distribution of profits and losses, and rights and responsibilities relating to the sale of a partnership interest, retirement of a partner, and disability or death of a partner.
Principal of a Power of Attorney
The person who grants legal authority to a designated agent to act under a power of attorney is known as the “principal” of the power of attorney. Previously, the principal of a power of attorney was known as the “donor” of the power of attorney.
Probating an Estate
If the person who died (“decedent”) had a valid Will, the process of collecting and distributing the estate’s assets is referred to as probating the estate.
Proponent of the Will
The person claiming that the Will is valid, and was executed in conformity with the statutory and procedural requirements of New York law
Power of Attorney
Legal document that authorize a trusted relative, friend or other designated person to take care of some or all of your legal or financial matters. It can be limited to a particular transaction, or type of transaction, or it may be broad in scope. The Power of Attorney may be effective immediately, or may only become effective in the event that you become mentally or physically incapacitated, or upon some other occurrence.
Revocable Living Trust (also called an Inter Vivos Trust)
A trust that is created during the lifetime of the grantor (person who transfers property to the trust.) The Revocable Living Trust is sometimes referred to as a Family Trust. The grantor of the trust is sometimes referred to as the settlor.
Shareholders’ Agreement (Stockholders’ Agreement)
An agreement among the shareholders of a corporation, establishing the shareholders’ rights and responsibilities, including management of the business, rights and responsibilities in the event of a shareholder’s sale of stock interest, retirement, disability, death, etc.
Shareholders’ Derivative Action
A lawsuit commenced by a corporation’s shareholders on behalf of the corporation, which seeks to protect the shareholders’ interests, due to corporate waste or other mismanagement of the corporation.
Stock Buy-Out
One or more shareholders purchasing another shareholder’s stock in a corporation. The shareholders’ agreement often contains provisions that govern stock buy-outs.
Stock Sale of a Business
A method of transferring ownership of a business, by transferring all the shares of stock of the corporation, or all the units of ownership of an LLC that owns the business. The purchaser of a business structured as a stock sale needs to take particular precautions to insure that the purchaser is not buying a business that is subject to undisclosed debts or liabilities.
Testamentary Trust
A trust that becomes effective only upon the death of the person creating the trust. The Testamentary Trust is not created by a separate trust document, but rather is created as part of the grantor’s Last Will and Testament (“Will”)
Will Contest
Lawsuit in the Surrogate’s Court claiming that the decedent’s Will is invalid, and therefore that the decedent’s property should pass either by the terms of a prior Will, or by the laws of intestacy (which provide for distribution of the assets of someone who dies without a valid Will.)
New York Accident Law Glossary
Additional Personal Injury Protection Insurance Coverage
Optional insurance coverage that increases the monetary limits under the standard No-fault (Personal Injury Protection) Insurance. Strict deadlines apply to the filing of the required legal papers to make a claim under this coverage.
Anterior Cruciate Ligament (ACL)
A cruciate ligament of the knee that crosses the posterior cruciate ligament to attach to the femur. The ACL prevents hyper-extension of the knee and prevents the tibia from sliding forward in relation to the femur. Injuries to the ACL, including tear of the ACL are common when the knee is subject to severe trauma from an accidental injury or from a sports injury
Arthroscopic Surgery
Arthroscopic Surgery is a minimally invasive surgical procedure which enables the surgeon to inspect the injury and repair the damage. Arthroscopy is a surgical procedure whereby the surgeon inspects the joint with a miniature scope (camera) inserted through a tiny hole. If damage is detected, it can usually be repaired with surgical tools inserted through another tiny hole, under the guidance of the scope. Arthroscopic surgery is often used to repair traumatic injuries of the knee or shoulder, and sometimes the wrist, ankle or hip.
Attorney-Client Relationship
Legal relationship created when a client hires a lawyer to represent him or her. The lawyer has an obligation to represent the client’s best interests in the legal claim, lawsuit, or other matter for which the attorney is hired. Also, subject to certain exceptions, the lawyer must also protect confidential information obtained from the client in the course of the legal representation.
Bodily Injury Liability Insurance
Coverage on a motor vehicle insurance policy that insures the vehicle owner and authorized drivers for claims made against them for injuries sustained by others due to the negligence or fault of the insured vehicle owner or authorized driver. This coverage provide protection if you are sued by one or more people for their injuries arising out of a motor vehicle accident.
Comparative Negligence
The legal principle in some states that permits an accident victim to recover for personal injuries, even if the injured plaintiff shares some responsibility for the accident. For example, under New York’s Comparative Negligence law, subject to certain limitations, an accident victim may recover monetary damages for injures sustained in a New York accident, even if the injured party was partially at fault. However, the recovery will be reduced by the percentage of fault attributable to the injured party. (compare to Contributory Negligence)
Comprehensive and Collision Insurance Coverage
Optional coverage on a motor vehicle insurance policy that, subject to policy limits and deductibles, protects the insured vehicle against fire, theft, vandalism, collision or other damage to your car caused by stated perils.
Contingency Fee
Fee arrangement by which the attorney’s legal fee is based solely on the outcome of the case, and not on the amount of hours worked, number of court appearances, time spent preparing the case for trial, presenting the case to the jury, etc. Usually, the fee is calculated as a percentage (or sliding scale of percentages) of the total amount recovered reduced by the costs and disbursements. Contingency Fees enable accident victims to obtain legal representation, regardless of the injured party’s financial ability to pay a lawyer. Most New York personal injury cases are accepted on a one-third contingency fee. This means that the attorney’s legal fee is equal to one third of the gross recovery in the case reduced by the costs and disbursements. If there is no recovery, the client pays no legal fee. Fees and expenses are paid at the conclusion of the case. Under New York law, in the event that there is no recovery in a contingency fee case, the client is responsible for the costs and disbursements incurred in representing the client in the case, including the expenses of the litigation.
Contributory Negligence
The legal principle in some states that prevents an accident victim from recovering monetary damages for personal injuries, if the injured party is partially at fault in causing the accident. Prior to New York State’s adoption of Comparative Negligence, an injured party was unable to recover for personal injuries if the injured party was partially at fault. Some states may still follow the Contributory Negligence doctrine, or a modified version of Contributory Negligence. (compare to Comparative Negligence)
Doctor-Patient Privilege
Legal relationship of confidentiality created when a patient is treated by a doctor or most other medical practitioners. Generally, the doctor or other health care provider has an obligation to protect confidential information obtained from the patient in the course of treatment. There are exceptions to this privilege, however such as the health insurers’ right to obtain copies of the patient’s medical records. Also, this privilege is automatically waived when the patient makes a legal claim for injuries caused by an accident or medical malpractice. Therefore, the medical records relating to injuries sustained in an accident or as a result of a medical malpractice can be obtained by the adversary’s attorney and insurance company.
Hip Fracture
A hip fracture is a fracture of the “neck” of the femur; which is the long bone in the upper part of the leg. The femoral neck is the portion of the bone between the shaft of the femur and the head of the femur.
Medical Payments Insurance Coverage (“Med Pay” Coverage)
Insurance endorsement on many insurance policies issued to owners or tenants of homes, apartments, stores and other premises, that provides reimbursement of an injured person’s expenses for reasonable and necessary medical and hospital treatment, up to the amount of medical payments coverage provided by the owner’s insurance policy. This coverage is often limited to $10,000 or less. The medical payments endorsement, if provided, is usually separate from liability coverage for pain and suffering, etc., and may not require a showing of fault. Therefore, the victim of an accident on the insured premises may be entitled to this coverage, without the need to prove that the policyholder was negligent or at fault in causing the accident. Strict deadlines apply to the filing of the required legal papers to make a claim under this coverage.
Meniscus
C-shaped disk of cartilage inside the knee joint. The meniscus cushions the ends of the bones in the knee joint, absorbs shock, aids in the stability of the knee joint, and lubricates and prevents excessive friction between the two bones of the leg (the femur and the tibia.) Traumatic knee injuries often result in a partial or complete tear of the meniscus (medial meniscus or lateral meniscus.) A meniscal tear may be caused by direct trauma to the knee, traumatic twisting of the knee, or abrupt turning of the knee joint. As we age, the meniscus may become more susceptible to traumatic tearing due to accidental injury to the knee. Since most of the meniscus has no blood supply, a torn meniscus is usually unable to repair itself by the normal healing process that occurs in other parts of the body. A torn meniscus may cause swelling and stiffness of the knee joint, and sharp pain on certain motions of the knee. If not treated, these symptoms may continue for years.
If the meniscus is damaged due to trauma caused by an accident, such as a trip and fall, or a motor vehicle collision, the torn piece of meniscus may move inside the knee joint, causing pain and dysfunction of the knee, and may cause you to experience popping, clicking and locking of the knee, as well as buckling of the knee, with a feeling of the knee “giving way.” After confirmation of the torn meniscus by MRI and/or the orthopedist’s medical examination, and after evaluating the severity of your symptoms, and other factors, your orthopedist might recommend surgery to correct the torn meniscus. Surgical repair of the torn meniscus is usually performed by arthroscopic surgery, which is much less invasive than traditional surgery. Arthroscopic knee surgery may involve repair of the torn meniscus, or meniscectomy (removal of the meniscus).
Motor Vehicle Accident Indemnification Corporation (“MVAIC”)
A New York State governmental agency that provides coverage for accident victims who are not insured by a motor vehicle insurance policy, and whose injuries were sustained due to the negligence or fault of vehicle owners or drivers, in the event that the vehicle that caused the accident is either unidentified (“hit and run” accident) or uninsured. Strict deadlines apply to the filing of the required legal papers to make a claim against the Motor Vehicle Accident Indemnification Corporation.
No-Fault Insurance (“Personal Injury Protection” or “PIP” Insurance Coverage)
Coverage on a motor vehicle insurance policy that, subject to certain limitations, pays the reasonable and necessary medical expenses incurred by the vehicle owner, driver and occupants (and pedestrian struck by the vehicle, if applicable), and lost earnings, subject to certain limitations, sustained as a result of the injuries sustained in a motor vehicle accident, regardless of which driver was negligent or at fault in causing the accident. Strict deadlines apply to the filing of the required legal papers to make a claim under this coverage.
No-Fault Threshold for “Serious Injury”
The legal principle in some states that prevents motor vehicle accident victims from recovering monetary compensation if the injuries sustained do not satisfy the legal definition of “serious injury.” For example, people injured in a motor vehicle accident in New York State will only be entitled to monetary compensation for their pain and suffering, if the injuries sustained satisfy the legal definition of “serious injury” pursuant to the New York State Insurance Law. This legal requirement is referred to as the “no-fault threshold.” If the injuries sustained in a New York motor vehicle accident, do not satisfy the “no-fault threshold”, the lawsuit can be dismissed by the court.
Open Reduction Internal Fixation (ORIF)
A type of orthopedic surgery used to repair a fractured bone, in those situations where the fracture would not heal properly with a simple cast or splint. In the operating room, the fracture is “reduced”, which means that the fractured bone or bone fragments are realigned to the correct anatomical position. Then, an internal fixation device, such as a metal plate or rod, is attached to the fractured bone or bone fragments with screws or pins to hold the pieces of the broken bone together.
Optional Basic Economic Loss (“OBEL”) Insurance Coverage
Optional coverage in a motor vehicle insurance policy that increases the limits of the standard No-Fault (Personal Injury Protection) Insurance. Strict deadlines apply to the filing of the required legal papers to make a claim under this coverage.
Property Damage Insurance
Coverage on a motor vehicle insurance policy that insures the vehicle owner and authorized drivers for claims made against them for damage to other vehicles or damage other people’s property arising out of a motor vehicle accident.
Supplementary Uninsured Motorist (“SUM”) Insurance (also referred to as “Underinsured Motorist” Insurance)
Optional coverage in a motor vehicle insurance policy that increases the limits of the standard Uninsured Motorist Insurance. Depending on the limits of SUM coverage purchased, this optional endorsement may provide additional protection for the vehicle owner, driver and occupants for their injuries sustained due to the negligence or fault of other vehicle owners or drivers. This coverage may apply if the vehicle whose driver caused the accident has limits of Bodily Injury Liability Coverage that are insufficient to adequately compensate the injured people who are protected by this coverage. Subject to certain limitations, for those injured accident victims covered by SUM insurance, this coverage may supplement the other vehicle’s Bodily Injury Liability Insurance. Strict deadlines apply to the filing of the required legal papers to make a claim under this coverage.
Uninsured Motorist (“UM”) Insurance Coverage
Coverage on a motor vehicle insurance policy that insures the vehicle owner, driver and occupants for their injuries sustained due to the negligence or fault of other vehicle owners or drivers. This coverage may apply if the vehicle whose driver caused the accident is either unidentified (“hit and run” accident) or uninsured. Strict deadlines apply to the filing of the required legal papers to make the claim under this coverage.
Workers’ Compensation Insurance
Insurance coverage that pays an employee’s medical and hospital expenses (subject to a fee schedule and authorization by the insurance company or the Workers’ Compensation Board), and partially pays for lost wages due to injuries sustained in the course of employment. Also, Workers’ Compensation benefits may include a lump sum payment for permanent injuries. Strict deadlines apply to the filing of the required legal papers to make a Workers’ Compensation claim.
Workers’ Compensation Defense
New York legal principle that generally prevents an employee from suing his employer for injuries sustained in the course of employment. Therefore, if the employee’s accident was caused solely by the injured person’s employer or co-worker, the workers’ compensation benefits are usually the exclusive remedy. However, if a person, business, etc. other than the injured person’s employer or co-worker was partially or entirely at fault in causing the accident, the injured person may sue those responsible parties for his or her injuries.
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