We know, we know.
Lawyers use some outdated language. And believe me, I know you don't want to deal with it. Why learn what it means when you can 1) skim over it and ignore the word, (don't act like you don't do that thing where you just gloss over the word and mumbo-jumbo it) or 2) have your lawyer handle it?
But like it or not, there's some terms that are going to pop up over and over in contracts and other legal documents. And not just in your business life, but your personal life as well! So what's a business owner to do?
We've got you. Every few weeks, we'll be posting 5 legal words you're too scared to ask someone to define. We'll take the legalease and make it legal-easy! Ok, sorry, that was a bad pun.
You'll be able to understand these terms and confidently trust your business-savvy self in reading contracts and understanding fine print, whether it's in a business sense or in your personal life.
We will make this as painless as possible. And we won't overload you!
Supra- Above. Often used in contracts when referencing previous sections.
Infra- After. Often used as "see discussion, infra" or "see Appendix A, infra."
Equity- Tricky tricky, this has several meanings! In legal jargon, we often mean:
1. The value of shares issued by a company; or
2. An old group of rights and procedures used to make judgments "fair" when traditional legal remedies weren't enough. Examples of equitable remedies include imposing a lien, redrawing property lines, or an injunction (ordering a person to do or not to do something).
The way it is used will determine the actual meaning. If we discuss "giving equity," that's usually offering shares in a company (meaning 1); if we discuss "remedies at equity" we're talking about meaning 2.
Whereas- A word lawyers REALLY LIKE but don't actually need. When I see "whereas," it serves more as a signal. I tell clients to cross it out when they are reading a contract, because it's not usually a substantive word. Usually seen in the beginning of a contract, when Parties are setting up their background. Example:
"WHEREAS Patty Planner is a wedding and event professional;
WHEREAS Connie Client is a designer of floral installations;
WHEREAS the Parties wish to collaborate on a styled shoot for both of their benefit,
NOW, THEREFORE the Parties agree as follows..."
Collateral- Tangible "Stuff" that guarantees you're going to do something, usually paying back a loan. Collateral can be a house, a car, your inventory, etc.; the opportunities are endless! An overly simplified example of collateral would be:
Patty Planner needs a loan to finance her new wedding mobile. As collateral, she puts her diamond necklace up as collateral.
Here, if dear old Patti doesn't pay the amount of money she owes for the wedding mobile, the seller will be able to take her diamond necklace and sell it to pay the amount owed.
You'll most likely encounter it in the context of a loan, renting equipment, or even using certain high-value pieces for a styled shoot.
What words would YOU like defined? Leave me a comment!