Legal Definitions - nominal

The term nominal is used to describe something that exists in name only, or to refer to a very small, symbolic amount.

• Existing in Name Only: This usage describes a situation where someone or something holds a title, position, or legal status but lacks actual power, authority, or practical significance.

  • Example 1: A large corporation might establish a subsidiary company that is legally registered but has no employees, no assets, and conducts no business operations. This subsidiary is a nominal entity, existing on paper but without real-world activity or influence.

    Explanation: The subsidiary exists "in name only" as a legal construct, but it doesn't function as an active business, illustrating the lack of practical substance despite its formal existence.

  • Example 2: In some organizations, a "Chairperson Emeritus" might hold the title out of respect for past service, but they no longer have any decision-making authority or day-to-day responsibilities. Their role is purely nominal.

    Explanation: The individual holds the title of Chairperson Emeritus, but their power and duties are non-existent, making their position one that exists solely in name.

• A Very Small or Symbolic Amount: This refers to a sum of money or a value that is extremely small, often symbolic, and not intended to reflect the true market value or actual loss. It's frequently used in legal contexts to acknowledge a right or a wrong without imposing a substantial financial burden.

  • Example 1: If a person's privacy was violated but they suffered no actual financial harm, a court might award them nominal damages, such as one dollar. This small award acknowledges that a legal wrong occurred, even without significant monetary loss.

    Explanation: The one-dollar award is a "nominal" amount because it is a tiny, symbolic sum, not intended to compensate for a large financial loss, but rather to legally recognize the violation of a right.

  • Example 2: A property owner might lease a small strip of land to a neighbor for a nominal rent of one dollar per year. This low rent ensures a legal contract exists and prevents claims of adverse possession, without the owner needing to charge a market rate.

    Explanation: The rent is "nominal" because it is an extremely small, symbolic payment that serves a legal purpose (establishing a lease agreement) rather than generating significant income for the landlord.