Archives: Glossary

Latin for “from the beginning.” Something void ab initio is treated as having had no legal effect from its start, not just from the time it is declared void.

Having no legal effect from the beginning, as if it never existed. A void act or document cannot be made valid by later approval. Void is contrasted with voidable, which describes something valid until a party with the right to do so chooses to cancel it, such as a contract induced by fraud. A court may set aside a void judgment (Fed. R. Civ. P. 60(b)(4)), but only in rare cases such as a serious lack of jurisdiction or a denial of due process; a judgment is not void just because it is wrong.

Not legally enforceable or obligatory. Non-binding mediation and arbitration produce recommendations or awards the parties may reject; in court-annexed arbitration under federal law, a party may demand a trial de novo within 30 days after the award is filed (28 U.S.C. § 657(c)). Decisions from other jurisdictions are non-binding (persuasive) authority.

A trial in which a jury decides the facts and returns a verdict, while the judge decides questions of law. In federal civil cases, a party who wants a jury must serve a written demand no later than 14 days after the last pleading directed to the issue is served, and file it (Fed. R. Civ. P. 38(b)); a party waives a jury trial unless its demand is properly served and filed (Fed. R. Civ. P. 38(d)).

The right to have a jury decide the facts. The Sixth Amendment guarantees an impartial jury in criminal prosecutions, and the Seventh Amendment preserves the right of trial by jury in federal suits at common law where the value in controversy exceeds twenty dollars. The Seventh Amendment has not been applied to the states, but state constitutions and laws provide civil jury rights in many cases.

A group of citizens sworn to decide questions of fact and return a verdict. A petit (trial) jury decides cases; a grand jury decides whether to bring criminal charges. In federal civil cases, a jury must begin with at least 6 and no more than 12 members (Fed. R. Civ. P. 48(a)), and federal juror qualifications are set by statute (28 U.S.C. § 1865).

A contract, called a policy, in which an insurer agrees to pay for specified losses or to provide specified benefits in exchange for premiums. Insurance is regulated mainly by the states; under the McCarran-Ferguson Act, the business of insurance is subject to state regulation and taxation, and federal law generally does not override state insurance law unless it specifically relates to insurance (15 U.S.C. § 1012).

Money or property received from a sale or other disposition. Under UCC Article 9, proceeds include whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral (UCC § 9-102(a)(64)), and a security interest generally attaches to identifiable proceeds of collateral (UCC § 9-315(a)(2)). The term is also used for loan proceeds and insurance proceeds.

Investments backed by a pool of mortgage loans, whose holders are paid from the borrowers’ payments. Agency mortgage-backed securities are issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac; others are issued privately. SEC-registered offerings of asset-backed securities are subject to the disclosure rules in Regulation AB. Securitizing a loan does not cancel or change the borrower’s obligation to repay it.

Latin for “at first sight.” Evidence that is sufficient, if not rebutted, to establish a fact or a claim. A prima facie case is one with enough evidence on each element to win unless the other side rebuts it. For example, the titles of the U.S. Code that have not been enacted into positive law are prima facie evidence of the law (1 U.S.C. § 204(a)); the statutes they contain are still fully binding law.