Legal English: “De Facto/De Jure”

December 28, 2012 by @WashULaw

Today’s phrases, “de facto” and “de jure,” (Pronunciation: dee fak-toh/di joo r-ee: Origin: Latin) are closely related concepts. De facto means a state of affairs that is true in fact, but that is not officially sanctioned. In contrast, de jure means a state of affairs that is in accordance with law (i.e. that is officially sanctioned). Most commonly, these phrases are used to describe the source of a business or governmental leader’s authority, but they apply to a wide variety of situations. Here are some example sentences that use the phrases:

• “Our country is going through some very difficult times. We have an elected prime minister, but he has no actual power. Instead, the general who sits at the head of the military is the de facto ruler of the nation.”
• “I know that, de jure, this is supposed to be a parking lot, but now that the flood has left four feet of water here, it’s a de facto swimming pool.”
• “We understand that these are the de facto bounds of your manufacturing facility, but what do the official land records and surveys show? Is that mountain of scrap rubber over there encroaching on anyone else’s property?”
• “The rest of the world considers your company to be a U.S. corporation, but where is your de jure jurisdiction of incorporation? If it’s somewhere offshore, we might have a P.R. issue on our hands.”

As you can see, de facto refers to situations that are true for practical reasons, whereas de jure refers to formal, official status of the matter.

Many international business matters and legal issues will involve these concepts. Rare are the businesses that can afford, for business or financial reasons, to get official counsel on all matters. As a result, practical solutions will often be carried out for many years before it is discovered that a law, regulation or official policy has been overlooked. 

The precise terms of contracts in particular, especially in form agreements, will often be disregarded during normal operations as business partners work through issues in practical ways that are outside or in conflict with the terms of the agreement. 

When such companies are later acquired or subject to other transactions, the difference between the de jure state of affairs and the de facto state of affairs will often be a matter for attorneys and business people to work out together.

Please note that these phrases are used as adjectives, and, as with other Latin or foreign language borrowings into English, they are commonly written in italics.