Legal Definitions - lot

In legal contexts, the term "lot" has several distinct meanings, primarily referring to a parcel of land, a unit of goods in a transaction, or a standard quantity of securities for trading.

• 1. A Tract of Land: This is the most common understanding of "lot," referring to a specific piece of land, often with defined boundaries, intended for a particular use such as building, parking, or agriculture.

  • Example 1 (Residential Building Lot): A real estate developer purchases a large acreage and subdivides it into smaller, individual parcels, each designated as a "lot" for building single-family homes. Each lot has specific dimensions and is recorded on a plat map, outlining its boundaries and easements.

    Explanation: Here, "lot" refers to a distinct, bounded piece of land ready for construction, illustrating its use as a defined tract for a specific purpose.

  • Example 2 (Commercial Parking Lot): A shopping mall constructs a large paved area adjacent to its building for customer vehicles. This area is commonly referred to as a "parking lot."

    Explanation: This example demonstrates "lot" as a tract of land designated for a specific functional purpose—in this case, parking vehicles.

  • Minimum Lot: This refers to a lot that meets the smallest permissible size or area according to local zoning laws. Zoning ordinances often specify minimum lot sizes to control density and maintain neighborhood character.

    • Example: A city's zoning code dictates that any new residential construction in a particular zone must be on a lot of at least 7,500 square feet. A developer planning a new subdivision must ensure that each individual parcel created for sale meets or exceeds this 7,500 square foot "minimum lot" requirement.

      Explanation: This illustrates how "minimum lot" specifies the smallest legal dimension a piece of land can have for a particular use under local regulations.

  • Nonconforming Lot: This describes a lot that was legally established and compliant with zoning laws at the time it was created, but which no longer meets current zoning requirements due to a change in the law. Despite the change, it is often allowed to continue its existing use under a "grandfather clause."

    • Example: A small, historic cottage was built in 1920 on a 4,000 square foot lot, which was perfectly legal at the time. In 1980, the town updated its zoning ordinance, requiring all new residential lots to be a minimum of 6,000 square feet. The cottage's original 4,000 square foot parcel is now considered a "nonconforming lot" because it doesn't meet the new size requirement, but the owner is still permitted to live there and make renovations because it was legal when established.

      Explanation: This example shows a lot that became "nonconforming" due to a change in zoning laws, even though it was lawful when it was originally created.

• 2. An Article for Sale, Lease, or Delivery: In commercial law, particularly under the Uniform Commercial Code (UCC), a "lot" can refer to a single item or a group of items that is the subject of a separate sale, lease, or delivery, regardless of whether it fully completes the entire contract.

  • Example 1 (Auction Sale): At an art auction, a collection of antique maps is offered for sale as a single unit. The auctioneer announces, "Next up, Lot 14: A rare collection of 18th-century cartography." A bidder then purchases this entire collection.

    Explanation: Here, "lot" refers to a distinct group of items (the antique maps) that are being sold together as one unit in a separate transaction.

  • Example 2 (Commercial Shipment): A furniture manufacturer receives an order for 200 identical office chairs. The chairs are shipped in four separate deliveries, with 50 chairs in each delivery. Each delivery of 50 chairs is considered a "lot" for the purpose of tracking and acceptance under the sales contract.

    Explanation: This illustrates "lot" as a distinct unit of goods being delivered, even though it's part of a larger overall order.

• 3. A Specified Number of Shares or Quantity of a Commodity for Trading: In finance, "lot" refers to a standard or specific quantity of financial instruments, such as stocks or bonds, designated for trading on an exchange.

  • Round Lot: This is the established standard unit of trading for stocks and bonds on an exchange. For stocks, a round lot is typically 100 shares. For bonds, it's usually a par value of $1,000 or $5,000.

    • Example: An investor places an order to buy 200 shares of a technology company. Since the standard trading unit for stocks is 100 shares, this purchase consists of two "round lots."

      Explanation: This shows a "round lot" as the standard, easily tradable block of shares.

  • Odd Lot: This refers to a number of shares of stock or the value of a bond that is less than a standard "round lot."

    • Example: An investor wants to sell 75 shares of a particular stock. Because 75 shares is less than the standard 100-share "round lot," this transaction involves an "odd lot." Odd lots can sometimes trade at slightly different prices or incur different fees than round lots.

      Explanation: This demonstrates an "odd lot" as a quantity of shares that falls below the standard trading unit.