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Simple English definitions for legal terms
factor
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A quick definition of factor:
A factor is a reason or cause that leads to a certain outcome. It can also refer to a person or company hired to sell someone else's property, or to someone who buys accounts receivable in exchange for immediate cash.
A more thorough explanation:
A factor is a cause or reason that contributes to a result. For example, lack of sleep can be a factor in poor academic performance.
A factor can also refer to an agent hired to sell property on behalf of its owner. The factor is given control and possession of the property from the start of the sale period until either the time of sale or the end of the agency relationship. For instance, a homeowner may hire a real estate agent as a factor to sell their house.
Another meaning of factor is someone who buys accounts receivable in exchange for a lump sum of money. The factor acquires rights to the future income stream from the accounts receivable, and the seller acquires immediate cash to fuel its business. For example, a small business may sell its accounts receivable to a factor to get cash quickly to pay its bills.
These examples illustrate how a factor can be a cause or reason for something, an agent hired to sell property, or someone who buys accounts receivable for immediate cash.