naked option
An opportunity to buy stock at a fixed price, offered by a seller who does not own the stock to back up the promise. If the buyer wants to exercise the option, the seller must purchase the stock at market price to make good on the offer.
natural person
A living, breathing human being, as opposed to a legal entity such as a corporation. Different rules and protections apply to natural persons and corporations, such as the Fifth Amendment right against self-incrimination, which applies only to natural persons.
The process by which a foreign person becomes a U.S. citizen. Almost everyone who goes through naturalization must first have held a green card for several years. A naturalized U.S. citizen has virtually the same rights as a native-born American citizen.
negative amortization
See capitalized interest.
negative pregnant
A denial of wrongdoing in which a person actually admits more than she denies. For example, if a defendant who is accused of embezzling $2 million in 1996 denies that she embezzled $2 million during that year, the denial is pregnant with the possibility that she might have embezzled a different sum of money during a different time period.
negotiable instrument
A written document that represents an unconditional promise to pay a specified amount of money upon the demand of its owner. Examples include checks and promissory notes. Negotiable instruments can be transferred from one person to another, as when you write "pay to the order of" on the back of a check and turn it over to someone else.
net earnings
Earnings that remain after an employer subtracts mandatory deductions (such as income tax, union dues and Social Security contributions) from an employee's gross income.
net estate
The value of all property owned at death less liabilities or debts.
net lease
A commercial real estate lease in which the tenant regularly pays not only for the space (as he does with a gross lease) but for a portion of the landlord’s operating costs as well. When all three of the usual costs--taxes, maintenance and insurance--are passed on, the arrangement is known as a "triple net lease." Because these costs are variable and almost never decrease, a net lease favors the landlord. Accordingly, it may be possible for a tenant to bargain for a net lease with caps or ceilings, which limits the amount of rent the tenant must pay. For example, a net lease with caps may specify that an increase in taxes beyond a certain point (or any new taxes) will be paid by the landlord. The same kind of protection can be designed to cover increased insurance premiums and maintenance expenses.
net taxable estate
See taxable estate.
next friend
A person, usually a relative, who appears in court on behalf of a minor or incompetent plaintiff, but who is not a party to the lawsuit. For example, children are often represented in court by their parents as "next friends."
next of kin
The closest relatives, as defined by state law, of a deceased person. Most states recognize the spouse and the nearest blood relatives as next of kin.
no-fault divorce
Any divorce in which the spouse who wants to split up does not have to accuse the other of wrongdoing, but can simply state that the couple no longer gets along. Until no-fault divorce arrived in the 1970s, the only way a person could get a divorce was to prove that the other spouse was at fault for the marriage not working. No-fault divorces are usually granted for reasons such as incompatibility, irreconcilable differences, or irretrievable or irremediable breakdown of the marriage. Also, some states allow incurable insanity as a basis for a no-fault divorce. Compare fault divorce.
no-fault insurance
Car insurance laws that require the insurance companies of each person in an accident to pay for medical bills and lost wages of their insured, up to a certain amount, regardless of who was at fault. The effect of no-fault insurance laws is to eliminate lawsuits in small accidents. The advantage is the prompt payment of medical bills and expenses. The downsides are that the amounts paid by no-fault policies are often not enough to fully cover a person's losses and that no-fault does not compensate for pain and suffering.
nol. pros.
See nolle prosequi.