Legal Definitions - naked

In legal terms, naked describes an act, right, or agreement that exists in form but lacks a crucial supporting element, such as proper legal consideration, necessary authorization, or a required formality, to make it fully valid, enforceable, or complete. It suggests something that appears to be legally sound but is missing an essential component that would give it full legal weight or effect.

• Naked Promise: This refers to a promise made without any "consideration" – meaning something of value exchanged between the parties. For a contract to be legally binding, both sides typically need to give up something or promise to do something in return for the other's promise.

  • Example: Sarah promises her friend Tom that she will give him her old car next month, purely out of generosity, and Tom doesn't offer anything in return. If Sarah changes her mind, Tom generally cannot sue her to enforce this promise because it is a naked promise. It lacks the mutual exchange of value (consideration) required to form a legally enforceable contract.

• Naked Trust: This describes a type of trust where the trustee holds legal title to property but has no active duties or responsibilities beyond simply transferring the property to the beneficiary upon demand. The trustee acts as a mere custodian.

  • Example: A parent creates a trust for their adult child, naming a bank as trustee. However, the trust document specifies that the bank's only duty is to hold the property and transfer it to the child whenever the child requests it, without any discretion over investments, distributions, or management. In this scenario, the bank's role is that of a naked trustee because it lacks the active management duties typically associated with a substantive trust, making its function largely passive.

• Naked Power of Attorney: This refers to a document that purports to grant someone the authority to act on another's behalf, but it is legally invalid or ineffective due to a fundamental flaw, such as the grantor lacking mental capacity at the time of signing, or the document failing to meet essential legal formalities like proper witnessing or notarization.

  • Example: An elderly individual, suffering from advanced dementia, signs a document granting their neighbor a power of attorney to manage their finances. Despite the document being signed, a court might later declare it a naked power of attorney because the individual lacked the mental capacity to understand and consent to its terms at the time of signing, rendering the granted power legally void from its inception.