Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or a poor investment opportunity. This week’s word is the latter.

Written by Eric Wasik

Trophies, bridges, airports, or even an elementary school - all good things to have named after you. Two things you never want named after you are diseases and financial schemes: the former because you likely didn’t survive the eponymous disease and the latter because you likely got caught. Such was the fate of Charles Ponzi. An enterprising chap from Italy, Ponzi discovered a loophole of sorts in the international postage system. A person could purchase an international postal reply coupon (IRC), which acted as a kind of self-addressed stamped envelope, allowing the recipient to send a reply without having to pay the postage themselves. If the country you are sending the letter to was a member of the Universal Postal Union, the IRC could be exchanged for that country’s stamps to send the reply internationally. Ponzi discovered that the decreased cost of postage in his native Italy could allow IRCs to be bought at a lower price and exchanged for the more expensive American postage. Ponzi solicited people to invest the money needed to buy large amounts of IRCs with the promise of a return on their investment. He even gave them security notes to show their investment in his “company.”

Ponzi did pay off some of the first investor notes, but only by using the money he got from additional investors — not capital earned from his grand postage scheme. The payment of some initial notes, of course, created the appearance of a successful financial operation, enticing more investors. Ponzi never imported the IRCs and never paid many of the later notes. Eventually, Ponzi’s public relations agent discovered the impossibility of Ponzi’s stamp promises and sold his story to the Boston Post. A week later, Ponzi was in the hands of authorities, his scheme costing thousands of people millions of dollars.

Today, a Ponzi scheme can best be described as an investment structure that uses further investor capital to pay dividends to initial investors, creating the false impression of actual profit. By their nature, the scheme’s bubble will always burst, leaving some investors with without a profit and without their initial capital. The investor’s only hope of getting their money back is a suit against the scheme ringleader (if he or she hasn’t already skipped town for the Bahamas), likely for breach of contract or securities fraud. Judgments won often go unpaid by the schemer, who likely owes money to other investors. Duped investors are left without much to their name, and curse Ponzi’s.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or makes a great insult. This week’s word is the latter.

Written by: J. Aaron Landau

As any first year law student  struggling with the “reasonable person standard” can tell you, the last thing the legal world needs is more imaginative standards and tests. One novel concept, however, might be an exception: the charmingly named “moron in a hurry.” Like the “reasonable person,” the “moron in a hurry” is a legal fiction employed to represent the decisions someone might make under a given set of circumstances. That “someone,” however, isn’t reasonably prudent at all. Instead, it’s an imaginary conception of the least informed, least diligent consumer in a given market - and it’s making the transition from informal phrase to bona fide legal concept.

The phrase was first used in Morning Star Cooperative v. Express Newspapers in 1978. In that case, the People’s Press Printing Society sued Express Newspapers, alleging that Express’s tawdry new tabloid “The Daily Star” would adversely affect sales of their own Communist daily, “The Morning Star.” The Morning Star’s publisher argued that Londoners seeking to keep up on the daily news of the Communist Party might accidentally pick up the similarly-named celebrity gossip rag instead, besmirching the Morning Star’s good name and confusing its readers. 

The High Court of England rejected the claim, holding that “only a moron in a hurry would be misled” into confusing the two magazines. Today the two continue to publish under their respective titles, presumably with little confusion among readers.

In the U.S., the process of determining trademark infringement is largely similar. If Joe McDonald were to open “McDonald’s Sandwiches” in a market where McDonald’s Hamburgers also does business, he’d likely be sued for trademark infringement, given the “likelihood of confusion” that consumers would believe his sandwiches originated from the fast-food chain. By the same token, McDonald’s Hardware can operate without fear of legal action, since no consumer is likely to believe the company has suddenly branched out from hamburgers to hammers and nails.

In the grey area between those two extremes, the logic of the “moron in a hurry” test emerges. If there’s some possibility of confusion between two trademarks, but the only confused party would be a less-than-prudent consumer, the defendant’s mark should rightfully stand. As a Canadian court recently held, “it is not sufficient that the only confusion would be to a very small, unobservant section of society … [or] if the only person who would be misled was a ‘moron in a hurry.’” In 2006, Apple Computer used the same standard in successfully defending against the Beatles record label Apple Corps in the courts of England. Though the phrase hasn’t yet been employed by a federal court in the U.S., the concept is well-established: any “likelihood of confusion” isn’t determined upon the basis of just any consumer, but rather a reasonably prudent one. It’s only a matter of time before an artful attorney brings the “moron in a hurry” to the U.S. courts - and brings a chuckle to struggling law students.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or used by bank robbers. This week’s word is the latter.

Written by: Jeff W. Richards

Crime dramas frequently utilize the trope of a person reluctantly forced to commit heinous crimes because the criminal mastermind has taken his family hostage. The crimes may vary from simple burglary to (in the darker shows) murders or assassinations. This forces the person to live on the wrong side of the law, seeking to rescue his family and clear his name. But how can he ever be safe from the law after committing such dark deeds?

The answer is the concept of duress. Duress is an affirmative defense in both criminal and civil law.  The defendant admits to the court that the basis for the lawsuit is true. He did commit that crime, or sign that contract he is now accused of breaking… but! In his defense, he argues that he was forced to do such things by some other person. The defendant didn’t want to commit crimes or break contracts, but he had no choice due to another’s wrongdoing.

Duress is an absolute defense, meaning that if the court finds it caused the defendant’s actions, he will be cleared. Unfortunately, showing duress can be difficult. People are pressured in many ways without being subject to duress. To rise to the level that can clear a name, the coercion must be sufficient to overwhelm an ordinary person’s force of will. Typically, this means immediate threats of bodily harm to one’s self or loved ones. The threat must also be of such immediacy that the defendant has no other course of action available to him (a gun to the head, or a knife to a brother’s throat).

It is important that the duress both subjectively and objectively overwhelmed the defendant. If the defendant was not actually overwhelmed, or the court does not think an ordinary person would be overwhelmed, the defense fails.

This claim to the court is about equivalent to telling mom “he made me do it,” and will likely be met with the same scrutiny. It’d better be true duress if you expect any leniency from the court, and even that might not slip past “mom.”

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or can steer you toward the deepest pockets. This week’s word is the latter.

Written by: Darci G. Van Duzer

Erma Workingmom was panicked by the sudden demolition of her white picket fence as the delivery truck backed into her tiny yard. Her brother James Esquire consoled her with the words, “Don’t worry. We’ll get the money from Delivery Service.” Erma silently wondered how that was possible… the delivery service wasn’t at fault, only the driver. Little did she know, a force was fast at work distributing the burdens of economic losses and protecting innocent third parties. This force was tort law, and in this particular case, the common law doctrine of respondeat superior.

Literally meaning “let the master answer,” the respondeat superior doctrine used to be applied to master-servant relationships. It was intended to provide injured parties with an avenue to recover from the moneyed pockets of the master rather than just the moneyless pockets of the servant. While suing the servant was still an option, society viewed it as desirable to also hold accountable the one directly benefiting from the overall enterprise. Employers today are familiar with this doctrine; they are often considered vicariously liable for the injuries inflicted by their employees if the injuries occur within the scope of employment. Generally, the employer is not liable for an employee’s intentional torts, (unless they were committed in furtherance of the employer’s business). Whether an employee was acting within the scope of employment is often determined by looking at the time, place, and circumstances of the event, and whether the employee was acting for the benefit of the employer.

For example, let’s say in Erma’s case the delivery driver was making a routine stop to deliver a package when he backed into her fence. The driver was clearly acting within the scope of his employment as a delivery driver; it was performing the duties he is paid to perform, for the benefit of the delivery service, and was not intentional. If, however, the driver had been visiting his paramour illicitly when he was supposed to have been working, he might not only find himself fired, but also personally liable for the damage to the fence caused in the course of his frolic away from work. The unlucky driver could also be liable if he intentionally backed into the yard because he did not like Erma’s garden gnomes. As irritating as lawn ornaments are, the driver’s malicious intentions would most likely serve to clear the Delivery Service of liability (unless the driver was acting on behalf of the Service). If all of this seems a little unfair, remember that although the master may have to shell out the bucks, the master is typically also the one with insurance!

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or could save you from a painfully embarrassing mispronunciation at your next office party. This week’s word is the latter.

Written by: Darci G. Van Duzer

Most people have, from time to time, found themselves stranded in front of the television set at 2 a.m. suffering from an acute case of insomnia. During the course of the fascinating late night infomercial hawking the new caulking ray-gun home security device that seals cracks while preventing ninja attacks, the announcer states, “This item is 100% guaranteed; created by a bona fide expert in the field.” Although the brain realizes that the use of Latin somehow lends credibility to the announcer, what exactly does “bona fide” mean?

“Bona fide”- pronounced bo-nuh feid, NOT bo-nuh fee-day - literally signifies “in good faith,” but has evolved in common parlance to encompass a variety of meanings dependant upon its context. Generally, the term is used to denote that a person or thing is genuine, that something is without fraud or deceit. People often refer to someone’s “bona fides,” meaning their credentials or documentation. The phrase is also used to emphasize authenticity or legitimacy, such as a bona fide artist, or bona fide prodigy.

When used in the legal context the term takes on a somewhat different meaning. More often “bona fide” will have to do with a person’s state of mind or intent. In contract law the term refers to the requirement that parties entering into a contract or transaction do so in good faith, without fraudulent means or motives. The absence of this good faith intent (or honesty) can void a contract in some cases, and may be a factor weighed by the court in deciding damages. A “bona fide occupational qualification” is an affirmative defense in employment discrimination cases allowing employers to consider certain characteristics when hiring or firing employees that would otherwise be unlawful under civil rights laws. This defense essentially means that the employer has a genuine and valid reason for its decision not arising from unlawful discrimination. The “bona fide purchaser” is a term used in the law of real and personal property to refer to an innocent party who purchases property without notice that anyone else already has title or claim to that particular property. Again, the term “bona fide” refers to the intent of the party as being genuine or without deception.

The mere use of the term “bona fide” cannot in and of itself authenticate the intent of a person, a fact that late-night viewers would be well served to remember. Though the ray-gun expert may be what he or she claims, and there may in fact be a roving band of ninjas bent on home invasion, chances are that the expert’s bona fides aren’t really that bona fide.  The law can only require good faith; it can’t ensure that it always exists.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or could make you rethink a spur-of-the-moment marriage to that person you just met in Vegas. This week’s word is the latter.

Written by: Lauren E. Trent

Given the media hype often surrounding celebrity annulments, it is no surprise that the process is commonly misunderstood as an easy way out of a bad decision. Divorce is something we all understand — for whatever reason the parties ask the courts to end a completely valid marriage. It is often a long process, including standard waiting periods before the divorce will be final. Petitioning for an annulment, on the other hand, means asking a court to immediately declare the marriage invalid. Since an annulment treats a marriage as if it never happened (which may be highly attractive, depending on who you married), it will only be granted in very limited circumstances.

Under most states’ laws, grounds for annulment exist if the marriage was unlawful, where there was fraud, duress, undue influence, or a party did not have the capacity to consent to marriage. Duress and undue influence are simple concepts: it’s about pressuring one party into the marriage or taking advantage of them to the extent that they do not exercise free will. An unlawful marriage might involve people who are too closely related under state law, or where one party was already married. Fraud may come up where one party lied to the other about something important in order to convince them to marry. The significance of a lie warranting annulment varies from state to state, but the quintessential example would be “You’re the father of my baby and I want us to be a family.” (Sadly, “Of course we’ll share household work equally!” does not constitute fraud.)

How about the fabled trip to Vegas that results in a marriage to a stranger? A court might find that one or both parties did not have the capacity to consent to a marriage if they were overly intoxicated. Failure to consent could also be any impairment that causes a person to not understand the nature, effect, and consequences of marriage when they entered into it. Minors (as defined by the particular state) are generally considered unable to consent to marriage, though there are circumstances under which a court will find that a valid marriage exists despite a party being underage.

The final way out of that Vegas marriage might be on the grounds that it was a joke. While joke weddings are no laughing matter, courts are likely to let the parties off the hook with an annulment when one or both of them never had any intention of taking on the obligations of marriage in the first place. Just remember: courts consider annulments carefully, and the fact that you just met the bride won’t be reason enough for a judge to declare that the marriage never happened.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or a matter of life-and-death. This week’s word is the latter.

Written by: Steve Glista

Henry Brown was shot as he tried to break into an apartment in Columbus, Missouri. Joe Horn shot and killed two men as they were running away from a home in Pasadena, Texas. Ashton Brown shot Damarcus King as Mr. King tried to force his way into a home in Cleburn, Texas. And William Wilkerson shot and killed Jason Payne through the window of Wilkerson’s pickup truck outside of a party in Palm Beach, Florida.   

In most situations, American law goes out of its way to discourage people from trying to kill each other. Why might all of the shooters named above avoid prosecution?  Each of the shootings happened in a state that has recently enacted a version of the so-called “Castle Doctrine.” These laws can be traced to the old cliché that states “a man’s home is his castle.”

Castle Doctrine laws are in part a reaction to the potential for an unjust outcome in American law. In theory, a non-violent robber injured by his victim could win a lawsuit if the victim used too much force to defend himself. A robber’s estate might win a suit for wrongful death if the victim killed the robber instead of safely retreating from the confrontation.

Beginning with Florida in 2005, many state legislatures acted to prevent this potential injustice. Today, Castle Doctrine laws in thirty different states allow a person to use deadly force against anyone who illegally enters their home. In some of those states, the privilege extends to automobiles, workplaces, or any “occupied habitation,” such as when the shooter is threatened while in the home of another person (as Mr. Brown was when he fired his weapon at Mr. King).  

Most of the new laws have three main features in common. First, they remove the duty to retreat from some confrontations. Second, they codify the assumption that anyone attempting to enter an occupied home illegally has the capability and the intention to use deadly force. Finally, most of the new laws expressly remove criminal and civil liability from the shooter if his use of force fits within the boundaries of the law.  

Proponents of the Castle Doctrine argue that it will prevent home invasion robberies, because would-be robbers will back down once they realize that their lives are on the line.  Critics argue that lethal violence is an inappropriate response to property crimes, and that any deterrent effect will be more than offset by an increase in gun-related homicides. Since the laws are relatively new, it’s not yet apparent whether any state that has adopted the Castle Doctrine has seen a significant reduction in crime. However, one thing is clear: anyone planning a surprise visit to friends or family in a state with a Castle Doctrine law might want to call ahead.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or may remind you that suing your neighbor when they won’t replace the fence that Fido knocked down last week may not be the best option. This week’s word is the latter.

Written by: Lauren E. Trent

Most people imagine a dramatic courtroom battle when they think of resolving legal issues.  What they may not realize is that court isn’t always the best place to settle a dispute between private parties. Maybe there is more than money at stake, or perhaps the cost of litigation is too high when compared with the amount of money at issue. Sometimes there may not even be a clear legal remedy for the problem. In all of these cases, parties might turn to a mediator to help them resolve the dispute, instead of going to court.*

A mediator does not act as a judge, an arbitrator, or any other type of decision-maker. Rather, a mediator is a neutral third party that helps people to resolve an issue themselves. With the help of a mediator, you and your neighbor might sign an agreement to split the cost of the fence that their dog knocked down-after all, recall that your kids were using it as a jungle gym everyday last summer.  

Mediation presents the most distinct advantages over litigation when the parties have a relationship that will continue after the current issue resolves, or there is a need for creativity when fashioning a solution. There is just something about being served and going to court that makes people surly, and not likely to offer to get your mail the next time you go out of town. Mediation helps preserve relationships by avoiding the embarrassment of being hauled into court, and by giving people the opportunity to air concerns that a court would rightly ignore when evaluating a legal claim. The process also allows people the freedom to solve their problems in a way that best fits their situation, increasing the likelihood that they will abide by their agreements and feel good about the resolution. The key here is flexibility. 

In some areas of the law, mediation is a required first step rather than a pure substitute to litigation. In many counties, for example, parties to a small claims court action must attempt to resolve the issue in mediation prior to going before the judge. If the parties reach an agreement, nothing further happens with the court (unless one party fails to hold up their end of the deal). The defendant avoids a judgment on their record, and may be able to convince the plaintiff to accept a payment plan. Meanwhile, the plaintiff can avoid the time and risks involved in going forward with trial, and increase the likelihood that they will collect money from an insolvent defendant by entering into that payment plan. 

Mediation is rapidly gaining popularity, and many larger cities and counties now offer free or low-cost community mediation services. Even if parties must pay for a mediator out of pocket, in many cases it will remain  cheaper than litigation. So the next time you find yourself at war with a neighbor, landlord, or ex-partner, consider calling a local mediation service before filing those papers. 

*While mediation occurs in a variety of contexts, including labor disputes, disputes between organizations, or even states, this explanation focuses on the kind of mediation that most of us might encounter in our daily lives.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or may make you reconsider telling Crazy Uncle Larry what you really think of him. This week’s word is the latter.

Written by: Amy E. Seely

Here’s the thing about wealth: when the grim reaper calls your number, you can’t take it with you.  So, to whom do your worldly possessions go?  The short answer is “it depends.”

If a will exists, then it is certified valid by the court (or “probated”) and the deceased’s written wishes are honored. If no valid will exists, the deceased is said to have died “intestate,” and who gets what is decided by local intestacy rules. The rules for determining the deceased’s heirs vary, and may be determined by statute or based on common law. 

Generally speaking, the court with jurisdiction over the deceased’s estate will appoint an administrator to distribute his property to his heirs (usually his next of kin). In certain circumstances, this may result in an heir receiving more by intestacy than he or she would have if a valid will had been in place, especially in cases of parents disowning their children or leaving a surviving husband or wife nothing in a will. 

A person can die intestate for a number of reasons, ranging from the rational to the absurd. First, many people find the idea of preparing for death to be a morbid concept, choosing instead to leave their potentials heirs’ inheritances undocumented rather than admit their own mortality. Others attempt to execute their own wills, not knowing that many states have specific requirements for the document to be considered valid. Still others may hire an attorney to draft a will, only for their heirs to discover that a small error on the part of the drafter has cost them millions. Just as unfortunate are the cases where a valid will exists, but no one in the grieving family knows where the will is kept! In a world full of natural disasters, invalid wills, and people determined to live forever, it’s not surprising that the deceased’s estate can go from probate to intestacy faster than one can say “rest in peace.”

So, what happens when someone dies and no heirs can be found?  When a person dies “heirless,” the estate is said to “escheat,” or pass directly to the government.  In fact, inheritance hunting has turned into a lucrative career in the US, where people scour obituaries and look for long-lost relatives to inherit large fortunes…with a percentage deducted as a finder’s fee, of course. So, as awful as it may sound, it may be a good idea to send that second cousin twice-removed a birthday card this year, and don’t forget to ask how their Microsoft stock is doing!