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Latin terms in contracts

Latin terminology is used quite frequently in contracts and other business documents. So what do all those words really mean? Here are definitions of the main terms you will see:

Ab initio (ab init)-From the beginning. Sometimes means breaking long-running contracts results in contracts having been broken from the start.

Bona fide-In good faith. Implies an amount of trust that parties will act without hidden motives. Opposite-Mala fides-in bad faith.

Bona vacantia-vacant property. Used in situations where property or goods end up with no owner. For example, and owner dies with no heirs, or company is struck off without all property being distributed. If a contract becomes void and property cannot become restored to an owner it can also occur. In the UK any such property belongs to the crown. Expensive proceedings are needed to get it back.

Caveat emptor-buyer beware. This general rule refers to the buyer being responsible for finding out if what they are buying is what they want. Certain information must be declared and disclosed to consumers under consumer regulations. Insurance contracts need to be covered by uberrima fides-but many are covered by the caveat emptor rule.

Consensus ad idem-an agreement on an idea. Parties to the contract must all be in agreement on the basis of the contract. If any party thinks differently then consensus has not been reached and the contract is void. See the page in this guide on general contract terms.

De facto-in fact. Opposite of de jure-meaning in law. Havign a practical effect differing from the legally accepted or expected situation. An example is a person deliberately or negligently giving the impression of a company director, can be treated as the de facto director. Any agreements or statements they make will bind the company as if a properly appointed director made them.

De jure-in law. According to the law.

De minimus-short for de minimis non curat lex: the law does not concern itself with trifles. Basic meaning is something is too insignificant or small to bother with.

De novo-start afresh. New contract started on the basis of the old.

Exempli gratia, or eg-for example. One or more examples from a greater list. Compare with id est, ie, (that it, such as) which indicates a full definitive list of all possibilities.

Ex gratia-out of grace. A gift made with no obligation on the part of the giver or receiver.

Ex parte-on behalf of. Usually a legal action taken by a party on behalf of someone else.

Ex post facto-because of some later event. A later event or occurrence interferes with an earlier agreement.

Id est, or ie-That is. Followed by a full list of items or definitions related to previous statement or condition. Differs from exempli gratia e.g. that gives some but not all examples of items or options.

Inter alia-among other things. Often used when the thing referred is part of a larger group without referring to whole group.

Mala fides-bad faith opposite to bona fide.

Nemo dat quod non habet-no one can give what they do not have. A seler cannot pass on a better right to a property that they actually have. If goods are stolen, the buyer does not get ownership even if there's o indication of goods being stolen.

Non compos mentis-not of sound mind. A person not of sound mind will not have full capacity to enter into a contract.

Non est factum-not my act. A denial that a party was involved in some action or dealings. It can occur if a party denies they signed a contract-if someone else forged their signature for example.

Par passu-equal and even. Relates to shares. Denotes that newly issued shares have the same rights and restrictions as previously issued shares.

Prima facie-at first sight. this is a fact that seems to have been correct but may subsequently be proven wrong by other evidence.

Pro rata-for the rate. divided in proportion ta an existing split.For example, a pro rata share issue can be offered in proportion to the number of shares each shareholder already has.

Pro tanto- for so much. To the extent specified, but no more.

Pro tempore, or pro tem-for the time being.

Quid pro quo-something for something. The usual definition for consideration-see the guide on general contract terms-in a contract, based on the idea that each party should offer something to the other.

Uberrima fides-utmost good faith. A party to certain types of contract must act in good faith and declare all relevant facts. Generally refers to insurance contracts whereby insurers need to know all known risks. Used as an exemption to the general rule of caveat emptor.
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