INTEREST
interest,n.1. The object of any human desire; esp., advantage or profit of a financial nature <conflict of interest>.2. A legal share in something; all or part of a legal or equitable claim to or right in property <right, title, and interest>. • Collectively, the word includes any aggregation of rights, privileges, powers, and immunities; distributively, it refers to any one right, privilege, power, or immunity.
absolute interest.An interest that is not subject to any condition.
beneficial interest.A right or expectancy in something (such as a trust or an estate), as opposed to legal title to that thing. • For example, a person with a beneficial interest in a trust receives income from the trust but does not hold legal title to the trust property. [Cases: Descent and Distribution 68–81; Trusts 1. C.J.S. Descent and Distribution §§ 68–71, 73–77, 82–88,
116; Trover and Conversion §§ 1–9, 14–18.] concurrent interest.See concurrent estate under ESTATE(1).
contingent interest.An interest that the holder may enjoy only upon the occurrence of a
condition precedent.
controlling interest.Sufficient ownership of stock in a company to control policy and
management; esp., a greater-than-50% ownership interest in an enterprise. [Cases: Corporations
180. C.J.S. Corporations §§ 327–330.] defeasible interest.An interest that the holder may enjoy until the occurrence of a condition.
direct interest.A certain, absolute interest <the juror was disqualified because she had a direct
interest in the lawsuit>.
entailed interest.An interest that devolves through lineal descendants only as a result of a fee tail.
entire interest.A whole interest or right, without diminution. See FEE SIMPLE.
equitable interest.An interest held by virtue of an equitable title or claimed on equitable grounds, such as the interest held by a trust beneficiary. [Cases: Trusts 139. C.J.S. Trover and
Conversion § 251.] executory interest.See EXECUTORY INTEREST.
expectation interest.The interest of a nonbreaching party in being put in the position that
would have resulted if the contract had been performed. See expectation damages under
DAMAGES; BENEFIT-OF-THE-BARGAIN RULE. [Cases: Damages 117; Fraud 59(2).]
financial interest.An interest involving money or its equivalent; esp., an interest in the nature
of an investment. — Also termed pecuniary interest.
future interest.See FUTURE INTEREST. inalienable interest.An interest that cannot be sold or traded.
inchoate interest.A property interest that has not yet vested. [Cases: Dower and Curtesy
29–53. C.J.S. Dower §§ 41–63, 141, 153–162.]
insurable interest.A legal interest in another person’s life or health or in the protection of property from injury, loss, destruction, or pecuniary damage. • To take out an insurance policy, the purchaser or the potential insured’s beneficiary must have an insurable interest. If a policy does not have an insurable interest as its basis, it will usu. be considered a form of wagering and thus be
held unenforceable. See wager policy under INSURANCE POLICY. [Cases: Insurance
1779–1795. C.J.S. Insurance §§ 218–231, 233–252.]
interest in the use and enjoyment of land.The pleasure, comfort, and advantage that a person may derive from the occupancy of land. • The term includes not only the interests that a person may have for residential, agricultural, commercial, industrial, and other purposes, but also interests in having the present-use value of the land unimpaired by changes in its physical condition.
joint interest.An interest that is acquired at the same time and by the same title as another
person’s. See joint tenancy under TENANCY.
junior interest.An interest that is subordinate to a senior interest.
legal interest. 1. An interest that has its origin in the principles, standards, and rules developed by courts of law as opposed to courts of chancery. 2. An interest recognized by law, such as legal title.
legally protected interest.A property interest that the law will protect against impairment or
destruction, whether in law or in equity.
liberty interest.An interest protected by the due-process clauses of state and federal constitutions. See FUNDAMENTAL RIGHT(2). [Cases: Constitutional Law 254.1. C.J.S.
Constitutional Law §§ 977–978, 980, 1418; Right to Die§ 2.]
multiple interest.A property interest that is good against an indefinitely large number of
people.
pecuniary interest.See financial interest. possessory interest.See POSSESSORY INTEREST.
present interest. 1. A property interest in which the privilege of possession or enjoyment is
present and not merely future; an interest entitling the holder to immediate possession. — Also termed present estate. Cf. FUTURE INTEREST. [Cases: Estates in Property 1. C.J.S. Estates §§ 2–5, 8, 15–21, 116–128, 137, 243.] 2. A trust interest in which the beneficiary has the immediate beneficial enjoyment of the trust’s proceeds. 3. A trust interest in which the trustee has the immediate right to control and manage the property in trust.
proprietary interest.The interest held by a property owner together with all appurtenant rights,
such as a stockholder’s right to vote the shares. [Cases: Corporations 63.1.]
reliance interest.The interest of a nonbreaching party in being put in the position that would
have resulted if the contract had not been made, including out-of-pocket costs. [Cases: Damages
117.]
restitution interest.A nonbreaching party’s interest in preventing the breaching party from retaining a benefit received under the contract and thus being unjustly enriched. • The benefit may have been received from the nonbreaching party or from a third party.
reversionary interest.A future interest left in the transferor or successor in interest. See
REVERSION.
senior interest.An interest that takes precedence over others; esp., a debt security or preferred share that has a higher claim on a corporation’s assets and earnings than that of a junior obligation or common share.
terminable interest.An interest that may be terminated upon the lapse of time or upon the
occurrence of some condition.
undivided interest.An interest held under the same title by two or more persons, whether their rights are equal or unequal in value or quantity. — Also termed undivided right; undivided title. See joint tenancy; tenancy in common under TENANCY. [Cases: Joint Tenancy 1; Tenancy in
Common 1. C.J.S. Estates § 19; Joint Tenancy§§ 2, 4, 7–9; Tenancy in Common §§ 2–5.]
vested interest.An interest the right to the enjoyment of which, either present or future, is not
subject to the happening of a condition precedent.
working interest.See WORKING INTEREST.
3. The compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use; esp., the amount owed to a lender in return for the use of borrowed money. — Also termed finance charge. See USURY. [Cases:
Interest 1, 8. C.J.S. Interest and Usury; Consumer Credit §§ 2–3, 5–6, 12.]
accrued interest.Interest that is earned but not yet paid, such as interest that accrues on real estate and that will be paid when the property is sold if, in the meantime, the rental income does not cover the mortgage payments.
add-on interest.Interest that is computed on the original face amount of a loan and that remains the same even as the principal declines. • A $10,000 loan with add-on interest at 8% payable over three years would require equal annual interest payments of $800 for three years,
regardless of the unpaid principal amount. With add-on interest, the effective rate of interest is typically about twice the stated add-on interest rate. In the example just cited, then, the effective rate of interest would be about 16%. — Also termed block interest. See add-on loan under LOAN.
Boston interest.Interest computed by using a 30-day month rather than the exact number of days in the month. — Also termed New York interest.
compound interest.Interest paid on both the principal and the previously accumulated interest.
Cf. simple interest. [Cases: Interest 60; Usury 49. C.J.S. Interest and Usury; Consumer
Credit§§ 6, 71, 156.]
conventional interest.Interest at a rate agreed to by the parties themselves, as distinguished from that prescribed by law. Cf. interest as damages. [Cases: Interest 4, 32. C.J.S. Interest and
Usury; Consumer Credit § 9, 38.]
discount interest.The interest that accrues on a discounted investment instrument (such as a government bond) as it matures. • The investor receives the interest when the instrument is redeemed. [Cases: United States 91. C.J.S. United States §§ 164, 167.]
gross interest.A borrower’s interest payment that includes administrative, service, and
insurance charges.
imputed interest.Interest income that the IRS attributes to a lender regardless of whether the lender actually receives interest from the borrower. • This is common esp. in loans between family members. [Cases: Internal Revenue 3132.20. C.J.S. Internal Revenue § 75.]
interest as damages.Interest allowed by law in the absence of a promise to pay it, as compensation for a delay in paying a fixed sum or a delay in assessing and paying damages. Cf. conventional interest.
lawful interest. 1. A rate of interest that is less than or equal to the statutory maximum. 2. See
legal interest.
legal interest. 1. Interest at a rate usu. prescribed by statute. • Courts often order monetary judgments to accumulate legal interest until paid. Cf. legal rate under INTEREST RATE. 2. See lawful interest.
moratory interest.See prejudgment interest.
New York interest.See Boston interest.
prejudgment interest.Statutorily prescribed interest accrued either from the date of the loss or from the date when the complaint was filed up to the date the final judgment is entered. • Prejudgment interest is usu. calculated only for liquidated sums. Depending on the statute, it may or may not be an element of damages. — Also termed moratory interest.
prepaid interest.Interest paid before it is earned. [Cases: Usury 44. C.J.S. Interest and Usury;
Consumer Credit §§ 135, 142, 147–150.] qualified residence interest.Tax. Interest paid on debt that is secured by one’s home and that
was incurred to purchase, build, improve, or refinance the home. • This type of interest is deductible from adjusted gross income. [Cases: Internal Revenue 3282. C.J.S. Internal Revenue
§ 286.]
simple interest.Interest paid on the principal only and not on accumulated interest. • Interest accrues only on the principal balance regardless of how often interest is paid. — Also termed straight-line interest. Cf. compound interest. [Cases: Interest 60. C.J.S. Interest and Usury;
Consumer Credit§§ 6, 71.] straight-line interest.See simple interest. unearned interest.Interest received by a financial institution before it is earned. unlawful interest.See USURY.
[Blacks Law 8th]