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leveraged buyout The purchase of a publicly held corporation's outstanding stock by its management or outside investors, financed mainly with funds borrowed from investment bankers or brokers and usu. secured by the corporation's assets. Abbr. LBO.

leveraged recapitalization Recapitalization whereby the corporation substitutes debt for equity in the capital structure, usu. to make the corporation less attractive as a target for a hostile takeover. Also termed leveraging up.

levis culpa (lee-vis kal-pa). [Latin "slight fault"]. 1. Ordinary negligence. 2. Failure to act as the ideal paterfamilias should. - Also termed culpa levis; culpa levis in concreto. See ordinary negligence under NEGLIGENCE.

levissima culpa (Ia-vis-a-ma kal-pa). [Latin "the slightest fault"] Slight negligence. Also termed culpa levissima. See slight negligence under NEGLIGENCE.

levy court A court in the District of Columbia that exercised many of the functions typical of county commissioners or county supervisors in the states, such as constructing and repairing roads and bridges.

lexical definition A dictionary-style definition of a word, purporting to give the full meaning of a term.

liability bond A bond intended to protect the assured from a loss arising from some event specified in the bond.

liability dividend See scrip dividend.

liability insurance An agreement to cover a loss resulting from the insureds liability to a third party, such as a loss incurred by a driver who injures a pedestrian. The insureds claim under the policy arises once the insureds liability to a third party has been asserted. Also termed third-party insurance; public-liability insurance.

liberal construction An interpretation that applies to a writing in light of the situation presented and that tends to effectuate the spirit and purpose of the writing. Also termed eqUitable construction; loose construction; broad interpretation. Cf. strict construction. "liberal construction. , . expands the meaning of the statute to embrace cases which are clearly within the spirit or reason of the law, or within the evil which it was designed to remedy, provided such an interpretation is not inconsistent with the language used. It resolves all reasonable doubts in favor of the applicability of the statute to the particular case." William M. Lile et aI., Brief Making and the Use of Law Books 343 (3d ed. 1914),

liberal constructionism Broad interpretation of a text's language, including the use of related writings to clarify the meanings of the words, and possibly also a consideration of meaning in both contemporary and current lights. Also termed broad constructionism; loose constructionism.

liberal constructionist A decision-maker who derives the meaning of a text's language not only from the words but from reasonable inferences drawn from the words and from other sources, such as a statute's legislative history. A liberal constructionist may also consider the reasonableness ofan interpretation under modern social mores. Also termed broad constructionist, loose constructionist. See liberal constructionism under CONSTRUCTIONISM. Cf. strict constructionist.

liberal interpretation Interpretation according to what the reader believes the author reasonably intended, even if, through inadvertence, the author failed to think of it. Also termed mixed interpretation.

liberative prescription (lib-a-ra-tiv). Civil law. A bar to a lawsuit resulting from its untimely filing. La. Civ. Code art. 3447. This term is essentially the civil-law equivalent ofa statute of limitations. See STATUTE OF LIMITATIONS.

liberty interest An interest protected by the due-process clauses of state and federal constitutions. See FUNDAMENTAL RIGHT (2).

license bond A bond required of a person seeking a license to engage in a specified business or to receive a certain privilege. Also termed permit bond.

lIED abbr. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS.

liege subject See natural-born subject.

lien account A statement of claims that fairly informs the owner and public of the amount and nature of a lien.

lien creditor A creditor whose claim is secured by a lien on the debtor's property. UCC § 9-102(a)(52).

lieu land (loa). Public land within indemnity limits granted in lieu of those lost within place limits.

life annuity An annuity payable only during the annuitant's lifetime, even if the annuitant dies prematurely.

life beneficiar One who receives payments or other benefits from a trust for life.

life estate An estate held only for the duration of a specified person's life, usu. the possessor's. Most life estates created, for example, by a grant "to Jane for life" are beneficial interests under trusts, the corpus often being personal property, not real property. Also termed estate for life; legal life estate; life tenancy. See LIFE TENANT.

life estate pur autre vie (par oh-tra vee). A life estate for which the measuring lite - the life whose duration determines the duration of the estate is someone's other than the possessor's. Also spelled life estate per autre vie.

life insurance See LIFE INSURANCE.

life land Land leased for a term measured by the life of one or more persons. Also termed lifehold.

life policy A life-insurance policy that requires lifetime annual fixed premiums and that becomes payable only on the death of the insured. - Also termed regular life policy.

life sentence A sentence that imprisons the convicted criminal for life though in some jurisdictions the prisoner may become eligible for release on good behavior, rehabilitation, or the like.

life tenancy See life estate under ESTATE (1).

life tenant See LIFE TENANT.

life-income period-certain annuity An annuity that pays a specified number of payments even if the annuitant dies before the minimum amount has been paid.

life-qualified jury In a case involving a capital crime, a jury selected from a venire from which the judge has excluded anyone unable or unwilling to consider a sentence of life imprisonment, instead of the death penalty, if the defendant is found guilty. Cf. death-qualified jury.

lifetime gift See inter vivos gift·

light-and-air easement A negative easement preventing an adjoining landowner from constructing a building that would prevent light or air from reaching the dominant estate. See negative easement. Cf. solar easement.

like-kind exchange See LIKE-KIND EXCHANGE.

limit order An order to buy or sell at a specified price, regardless of market price. Cf. no-limit order.

limited administration An administration for a temporary period or for a special purpose.

limited admissibility The principle that testimony or exhibits may be admitted into evidence for a restricted purpose. Common examples are admitting prior contradictory testimony to impeach a witness but not to establish the truth, and admitting evidence against one party but not another. The trial court must, upon request, instruct the jury properly about the applicable limits when admitting the evidence. Fed. R. Evid. 105.

limited appeal An appeal from only certain portions of a decision, usu. only the adverse or unfavorable portions.

limited appearance See special appearance.

limited certiorari See narrow certiorari.

limited company A company in which the liability of each shareholder is limited to the amount individually invested. A corporation is the most common example of a limited company.

limited court A court having special jurisdiction conferred by statute, such as a probate court. - Also termed court of special jurisdiction.

limited debate Debate with restrictions. See LIMIT DEBATE.

limited divorce 1. A divorce that ends the legal relationship of marriage by court order but does not address financial support, property distribution, or care and custody of children.o In the days before no-fault divorce, a spouse might seek a quick divorce in a state with a short reSidency requirement (such as Nevada). Then courts in the home state would give full faith and credit only to the dissolution of the marital res, while maintaining sale jurisdiction over property-division, support, and custody issues. 2. Loosely, a legal separation. 3. See divorce a mensa et thoro. Cf. divorce a vinculo matrimonii.

limited executor An executor whose appointment is restricted in some way, such as time, place, or subject matter.

limited fee See base fee.

limited guaranty An agreement to answer for a debt arising from a Single transaction. - Also termed noncontinuing guaranty.

limited interdict A person whose right to care for himself or herself is restricted by a court decision because of mental incapacity; a person subject to limited interdiction. La. Civ. Code art. 390.

limited interdiction See partial interdiction.

limited interpretation See restrictive interpretation.

limited jurisdiction Jurisdiction that is confined to a particular type of case or that may be exercised only under statutory limits and prescriptions. Also termed special jurisdiction. Cf. general jurisdiction. "It is a principle of first importance that the federal courts are courts of limited jurisdiction. The federal courts ...cannot be courts of general jurisdiction. They are empowered to hear only such cases as are within the judicial power of the United States, as defined in the Constitution, and have been entrusted to them by a jurisdictional grant by Congress." Charles Alan Wright, The Law of Federal Courts § 7, at 27 (5th ed. 1994).

limited owner A tenant for life; the owner of a life estate. See life estate under ESTATE (1).

limited partner A partner who receives profits from the business but does not take part in managing the business and is not liable for any amount greater than his or her original investment. Also termed special partner; (in civil law) partner in commendam. See limited partnership under PARTNERSHIP.

limited partnership A partnership composed of one or more persons who control the business and are personally liable for the partnership debts (called general partners), and one or more persons who contribute capital and share profits but who cannot manage the business and are liable only for the amount of their contribution (called limited partners). The chief purpose of a limited partnership is to enable persons to invest their money in a business without taking an active part in managing the business, and without risking more than the sum originally contributed, while securing the cooperation of others who have ability and integrity but insufficient money. Abbr. L.P. Also termed special partnership; (in civil law) partnership in commendam. Unknown at common law, the limited partnership was derived from the commenda or societe en commandite of continental Europe to permit a person to invest and share in the profits of a partnership business and yet limit one liability to one investment. It was first recognized in the United States by a New York statute of 1822. It is now recognized by statute in all Americanjurisdictions. Henry G. Henn & John R. Alexander, Laws of Corporations § 28, at 86 (3d ed. 1983). [T]he two primary characteristics of a limited partnership [arejliability of limited partners only for their agreed contributions, and a hierarchical structure with management in one or more general partners and very little power or authority in the limited partners. Thus, limited partners are typically - although not necessarily passive contribu• tors of capital. In this respect they resemble shareholders in a corporation, but, depending on the details of the organizational documents, they may have greater or lesser rights. 3 Alan R. Bromberg & Larry E. Ribstein, Bromberg and Ribstein on Partnerships § 12.01, at 12:5-12:6 (1999).

limited policy 1. An insurance policy that specifically excludes certain classes or types of loss. 2. See basic-form policy.

limited power See POWER OF APPOINTMENT.

limited power of appointment A power of appointment that either does not allow the entire estate to be conveyed or restricts to whom the estate may be conveyed; esp., a power by which the donee can appoint to only the person or class specified in the instrument creating the power, but cannot appoint to oneself or one s own estate. Often shortened to limited power. Also termed special power of appointment.

limited publication Distribution of copies of an author s work to a selected group for a limited purpose and with no permission to copy the work, at a time when copies are not available to the general public. Before the Copyright Act of 1976 made publication irrelevant, courts distinguished between limited publication and general publication to decide whether federal copyright laws applied. Under that Act, a work published before January 1,1978 without proper copyright notice entered the public domain unless the publication was limited. Also termed private publication. Cf. general publication.

limited-liability company A company statutorily authorized in certain states that is characterized by limited liability, management by members or managers, and limitations on ownership transfer. Abbr. L.L.C. Also termed limited-liability corporation.

limited-liability corporation See limited-liability company under COMPANY.

limited-liability partnership A partnership in which a partner is not liable for a negligent act committed by another partner or by an employee not under the partner supervision. All states have enacted statutes that allow a business (typically a law firm or accounting firm) to register as this type of partnership. Abbr. L.L.P.

limited-market property See special-purpose property.

limited-policy insurance Insurance that covers only specified perils; esp., health insurance that covers a specific type of illness (such as dread-disease insurance) or a risk relating to a stated activity (such as travel-accident insurance).

limited-purpose public figure A person who, haVing become involved in a particular public issue, has achieved fame or notoriety only in relation to that particular issue.

line item Accounting. In a financial statement, a single entry or notation to which a particular dollar amount is attached. 3. In drafting, a subpart of text that is the next smaller unit than a subparagraph. In federal drafting, for example, "(4)" is the item in the following citation: Rule 19(a)(l)(B)(4). Also termed (in sense 3) clause.

lineal ascendant A blood relative in the direct line of ascent; ancestor. Parents, grandparents, and great grandparents are lineal ascendants.

lineal consanguinity The relationship between persons who are directly descended or ascended from one another (for example, mother and daughter, greatgrandfather and grandson, etc.).

lineal descendant A blood relative in the direct line of descent. Children, grandchildren, and great-grandchildren are lineal descendants.

lineal descent Descent in a direct or straight line, as from father or grandfather to son or grandson. Also termed direct-line descent.

lineal heir A person who is either an ancestor or a descendant of the decedent, such as a parent or a child. Cf. collateral heir.

link financing The obtaining of credit by depositing funds in another's bank account to aid the other in obtaining a loan.

liquid asset See current asset.

liquid debt A debt that is due immediately and unconditionally.

liquidated account An account whose assets are clearly ascertained, either by agreement of the parties or by law.

liquidated claim 1. A claim for an amount previously agreed on by the parties or that can be precisely determined by operation of law or by the terms of the parties' agreement. 2. A claim that has been determined in a judicial proceeding. Also termed liquidated demand,

liquidated damages- An amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches. If the parties to a contract have properly agreed on liquidated damages, the sum fixed is the measure of damages for a breach, whether it exceeds or falls short of the actual damages. Also termed stipulated damages; estimated damages. See LIQUIDATED-DAMAGES CLAUSE. Cf. unliquidated damages; PENALTY CLAUSE. "Where the terms of a contract specify a sum payable for non'performance, it is a question of construction whether this sum is to be treated as a penalty or as liquidated damages. The difference in effect is this: The amount recoverable in case of a penalty is not the sum named, but the damage actually incurred. The amount recoverable as liquidated damages is the sum named as such. In construing these terms a judge will not accept the phraseology of the parties; they may call the sum specified 'liquidated damages,' but if the judge finds it to be a penalty, he will treat it as such." William R. Anson, Principles of the Law of Contract 470 (Arthur L. Corbin ed., 3d Am. ed. 1919). "The distinction between a penalty and genuine liquidated damages, as they are called, is not always easy to apply. but the Courts have made the task simpler by laying down certain guiding principles. In the first place, if the sum payable is so large as to be far in excess of the probable damage on breach, it is almost certainly a penalty. Secondly, if the same sum is expressed to be payable on anyone of a number of different breaches of varying importance, it is again probably a penalty, because it is extremely unlikely that the same damage would be caused by these varying breaches. Thirdly, where a sum is expressed to be payable on a certain date.

liquidated debt A debt whose amount has been determined by agreement of the parties or by operation of law.

liquidating distribution A distribution of trade or business assets by a dissolving corporation or partnership. Also termed distribution in liquidation.

liquidating partner The partner appointed to settle the accounts, collect the assets, adjust the claims, and pay the debts of a dissolving or insolvent firm.

liquidating price See redemption price.

liquidation bankruptcy See CHAPTER 7 (2).

liquidation court Any court in which a liquidation proceeding takes place.

liquidation dividend A dividend paid to a dissolving corporation's shareholders, usu. from the capital of the corporation, upon the decision to suspend all or part of its business operations. - Also termed liquidating dividend.

liquidation preference A preferred shareholder s right, once the corporation is liquidated, to receive a specified distribution before common shareholders receive anything.

liquidation price A price that is paid for property sold to liquidate a debt. Liquidation price is usu. below market price. Also termed liquidation value.

liquor offense Any crime involving the inappropriate use or sale of intoxicating liquor. See DRAM-SHOP LIABILITY; DRIVING WHILE INTOXICATED.

list price A published or advertised price of goods; retail price.

listed security A security accepted for trading on a securities exchange. The issuing company must have met the SECs registration requirements and complied with the rules of the particular exchange. Also termed listed stock. See DELISTING.

listed species See candidate species.

listed stock See listed security under SECURITY.

listing agent The real-estate broker's representative who obtains a listing agreement with the owner. Cf. selling agent.

literal construction See strict construction.

literal contract 1. Roman law. A type of written contract originally created by and later evidenced by - an entry of the sum due on the debit side of a ledger, binding a signatory even though the signatory receives no consideration. Literal contracts were often used for novations. See LITTERIS OBLIGATIO. 'Though an obligation could be created by a literal contract in the time of Gaius, the so-called literal contract of Justinian was not, in itself, a means of creating an obligation, but was the evidence of an obligation created in some other way .... The true literal contract, as described by Gaius, may be defined as a means of creating an obligation to pay money by a fictitious entry ... in the creditor's account book ... with the consent of the intended debtor. A, with B's consent, enters the fact that B is indebted to him ... and thereupon B is under an obligation to pay, though no money has passed between them." R.W. Leage, Roman Private Law316-17 (C.H. Ziegler ed., 2d ed. 1930). 2. Civil law. A contract fully evidenced by a writing and binding on the signatory.

literal infringement Infringement in which every element and every limitation of a patent claim is present, exactly, in the accused product or process. Cf. DOCTRINE OF EQUIVALENTS.

literal proof Civil law. Written evidence. Cf. testimonial proof.

literary executor A limited-purpose executor appointed to manage copyrighted materials in an estate.

literary property See LITERARY PROPERTY.

litigation hold A notice issued in anticipation of a lawsuit or investigation, ordering employees to preserve documents and other materials relevant to that lawsuit or investigation. 2. Archaic. In England, tenure. This word occurs most often in conjunction with others - for example, freehold, leasehold and rarely in its separate form. See HOLDING (4).