Archives: Glossary

Under UCC Article 9, a person in whose favor a security interest is created or provided for under a security agreement, among others (UCC § 9-102(a)(73)) — for example, a lender holding a lien on a car or equipment. A security interest generally requires a security agreement authenticated by the debtor (UCC § 9-203(b)), so filing a financing statement naming yourself does not make you a secured party; we have not found a court decision upholding a “secured party creditor” claim of that kind.

To record something in an official list or public record. Examples include recording a deed in the county land records, registering a vehicle with the state motor vehicle agency, registering a business entity or its registered agent with the secretary of state or similar state office, registering a copyright claim with the U.S. Copyright Office (17 U.S.C. § 408), and registering a federal money judgment in another district (28 U.S.C. § 1963).

A statement acknowledging that something is true. In discovery, a matter admitted under Rule 36 is conclusively established unless the court permits the admission to be withdrawn or amended (Fed. R. Civ. P. 36(b)). In evidence law, a party’s own statement offered against that party is not hearsay (Fed. R. Evid. 801(d)(2)). “Admission” also means acceptance to practice law in a jurisdiction.

To acknowledge that something is true, or to allow something in. A party admits an allegation in its answer (Fed. R. Civ. P. 8(b)), and a matter in a request for admission is admitted unless the party timely answers or objects (Fed. R. Civ. P. 36(a)(3)). A court admits evidence when it allows it to be considered (Fed. R. Evid. 104(a)), and an attorney is admitted to practice when licensed by a court or bar.

To agree to an offer or to take something as given. In contract law, acceptance of an offer is a manifestation of assent to its terms in a manner invited or required by the offer (Restatement (Second) of Contracts § 50). For negotiable instruments, acceptance is the drawee’s signed agreement to pay a draft as presented (UCC § 3-409). We have not found a court decision holding that writing “accepted for value” on a bill or court paper pays or discharges a debt.

To refuse to accept. In contract law, rejecting an offer generally ends the offeree’s power to accept it. Under UCC Article 2, a buyer who rejects goods must do so within a reasonable time after delivery or tender, and the rejection is ineffective unless the buyer seasonably notifies the seller (UCC § 2-602(1)). In bankruptcy, a trustee may, with the court’s approval, reject an executory contract or unexpired lease of the debtor (11 U.S.C. § 365(a)).

To refuse to admit that an allegation is true, or to refuse a request. In an answer, a party must admit or deny the allegations asserted against it, and a denial must fairly respond to the substance of the allegation (Fed. R. Civ. P. 8(b)(1)(B), (b)(2)). An allegation that is not denied, other than one about the amount of damages, is admitted if a responsive pleading is required (Fed. R. Civ. P. 8(b)(6)). A court also denies a motion it refuses to grant.

A disagreement between parties about a fact, a right or a claim. In litigation, summary judgment depends on whether there is a genuine dispute as to any material fact (Fed. R. Civ. P. 56(a)). In consumer law, a consumer can dispute a debt with a debt collector in writing within the validation period (15 U.S.C. § 1692g(b)) or dispute inaccurate information with a credit reporting agency (15 U.S.C. § 1681i).

Latin for “in good faith.” Genuine, real, made honestly and without fraud. For example, a bona fide purchaser buys property for value without notice of another person’s competing claim, and many state recording laws protect such buyers.

Having legal force that must be followed. A binding contract is one the law will enforce; binding (or mandatory) authority is law a court must follow, such as a statute or a decision of a higher court in the same jurisdiction (binding precedent); and binding arbitration produces an award the parties have agreed to accept, subject to limited court review.