If you do not speak “business legalese” you may subscribe to the notion that it is designed as an instrument of intellectual torture.Take this for example: Why would the presence of mala fides make a contract void ab initio? Is uberrimae fidei really an exception to the caveat emptor principle or must the party claiming it also show that it was non est factum? If a contract term is prima facie unfair, can a court find that by consensus ad idem the parties actually rendered that term enforceable as they acted bona fide?

Confusing isn't it?

The problem does not lie only in the Latin terms. Does a deed conferring a Power of Attorney require apostillation if it is to be effective in a foreign jurisdiction? Would the court be willing to issue an injunction to prevent the rescission of a contract whose consideration is valid? And what exactly is joint and several liability? Under what circumstances would a moratorium be considered suspended?

See? Still confusing.

While I could go on and on, I cannot possibly cover the full range of possibilities in a single article. I do hope however that I have so far annoyed you enough to convince you to keep reading this and demystify some of the terms. So that I don’t make it seem like I’m trying to edge out the other writers here(though I secretly am), I’ll keep it brief and cover only six terms today.

1. Consideration refers to the thing that each party to a contract foregoes as his part of the bargain. Often, the consideration is the price paid on the one hand and the goods or services supplied on the other, but it is not limited to these. The consideration can even be a promise not to do something, such a promise not to take legal action.
2. Joint and Several Liability applies in certain contracts where several parties act together. It means that all the parties are responsible as a group but also as individuals. For instance, a person who is injured by the action of the directors of a company may in certain cases sue either all the directors or any of the directors.
3. Caveat emptor is a common term that means ‘buyer beware’. The buyer has the duty to find out what appertains to his purchase and he cannot claim ignorance if he buys something other than what he wanted or buys something that had encumbrances on it.
4. Uberrimae fides literally means utmost good faith. Its greatest application is in insurance contracts. The general rule is that the person seeking to benefit from an insurance cover must reveal all relevant information affecting the insurance policy. This obligation is so serious that its breach would lead to an insurance contract being void, regardless of premiums having been paid.
5. All of us have used the abbreviations i.e. and e.g. in our notes somewhere, but perhaps without ever having realised that they could have legal implications if they appeared in a contract. The full terms are id est and exempli gratia. The former means ‘that is’ as you already knew but it also means that the list given is conclusive. In a contract therefore, it would have the implication that there can be no other items other than the ones included. Exempli gratia means ‘for example’ and its connotation in a contract would be that the list given is not conclusive and can refer to other similar items.
6. Nemo dat quod non habet is one of the most basic and most crucial principles of business law. Loosely translated, the phrase means that none can give better title than they have. If a person sells goods he does not rightfully own, the buyer cannot subsequently acquire rightful ownership of those goods.

Thank me the next time you nonchalantly throw one of these into conversation and it makes you sound extremely well read. Be careful about the Latin pronunciation though, you do not want to negate your new-found glory by pronouncing the Latin U as an ‘ah’.