Legal English: “Legal Fiction”

Today’s phrase, “legal fiction,” (Pronunciation: LEE-gull FIK-shin; Origin: English) refers to a fictitious fact that is treated as true under the law for purposes of legal, administrative or other expediency. That is, in certain situations where it is more convenient for the law to consider the facts to be a certain way, a policy may be adopted creating the necessary legal fiction. (This definition is likely a bit confusing; we will explain the term more fully below.)

Here are some example sentences that use the word.

  • “For many legal purposes, a corporation is considered to be a ‘person,’ but at the moment of its creation, it is little more than a single piece of paper on record at a government office. The legal fiction, however, ensures that the corporation is subject to a wide number of laws and policies that are drafted such that they only apply to ‘people.”
  • “Prior to placing our child up for adoption, we were required to acknowledge that we were ‘strangers’ to the child under the law, thus relinquishing our parental rights. It was a painful moment, but our lawyer advised us that it was a legal fiction that was needed to allow him to be adopted by his new parents.”
  • “Members of Parliament in the United Kingdom are not permitted to retire, but there is a legal fiction that allows them to accept a nominal position that disqualifies them from further parliamentary service. It allows MPs to gracefully step down when it is time to yield their position.”

As you can see, legal fictions appear in many different scenarios and practice areas. But they are generally not to be extended beyond the circumstances of their creation, as this would often lead to absurd results. For example, just because a corporation is a “person” does not mean that it can be arrested by a police officer. A corporation can, however, be charged with criminal activity. Analogies may exist, however, and attorneys will no doubt attempt to argue for analogous treatment where appropriate.

In international business matters, legal fictions will often come into play. For an entity that owns assets in a secure facility in another country, the legal fiction of “constructive possession” may be relevant. An entity is said to have constructive possession of an item when, although the entity does not actually hold the item, it has some kind of access to the item. In our case, the entity owning goods in another country that are inside a locked facility may have constructive possession of the goods because it is the only party that has the keys to the facility.

For another example, in a complicated business transaction, there will be many interrelated agreements. Any agreement, standing alone, may be voidable for lack of consideration. However, the contract may recite that the obligations referenced therein were agreed to by a party in exchange for “$1, and other good and valuable consideration.” The dollar never changes hands, of course. It’s simply a legal fiction to support the legitimacy of the contract under common law requirements in the United States.