Legal Definitions - hold out

The term "hold out" has two distinct meanings in a legal context:

1. To represent oneself as having a particular status or authority.

• Definition: This occurs when an individual or entity acts or speaks in a way that leads others to reasonably believe they possess a certain legal status, role, or authority, even if that status is not formally or fully established. This can create legal obligations or liabilities based on the appearance they've created.

  Examples:

  • A person who regularly attends business meetings, introduces themselves to clients as a "senior partner" of a firm, and signs correspondence using that title, even though they have not formally invested in the firm or signed a partnership agreement.

    Explanation: By consistently acting and presenting themselves as a senior partner, this individual is holding themselves out as having that legal status. If clients rely on this representation, the firm might be legally bound by their actions, even if the individual lacked actual partnership status.

  • An employee who, without explicit authorization, frequently negotiates and finalizes sales contracts on behalf of their company, and the company is aware of this practice but does not intervene to correct the impression of authority.

    Explanation: The employee is holding themselves out as having the authority to bind the company to contracts. If the company permits this appearance to continue, it may be legally obligated to honor those contracts, even if the employee did not have formal permission to sign them.

2. To refuse to yield or submit; to stand firm.

• Definition: In this context, to "hold out" means to steadfastly refuse to agree to a demand, accept an offer, or change one's position, often during a negotiation or dispute, with the aim of achieving a more favorable outcome.

  Examples:

  • During a real estate transaction, a seller holds out for their original asking price, declining several lower offers, confident that a buyer will eventually meet their valuation in a competitive market.

    Explanation: The seller is holding out by firmly maintaining their desired price and refusing to compromise, hoping to secure better terms for the sale of their property.

  • A group of striking workers holds out for a significant increase in their hourly wage and improved health benefits during collective bargaining, even if it means extending their work stoppage for several weeks.

    Explanation: The workers are holding out by refusing to accept the employer's current offer and standing firm on their demands, using their collective action to push for a more advantageous agreement.