Legal Definitions - reconciliation

Reconciliation refers to the process of bringing two or more things into agreement or harmony, especially after a period of conflict, separation, or discrepancy.

• In a general legal context, reconciliation often means the restoration of a cooperative or peaceful relationship between parties who were previously in disagreement or dispute.

  • Example: After months of intense negotiations, two rival companies that had been locked in a patent infringement lawsuit decided to settle out of court. As part of the settlement, they agreed to a joint venture, marking a significant reconciliation of their business interests and a move from adversarial positions to collaboration.
  • Explanation: This example illustrates reconciliation as the resolution of a conflict between two entities, leading to a restored, or even new, harmonious working relationship instead of continued litigation.

• In family law, reconciliation specifically refers to the voluntary decision by spouses who have separated to resume their full marital relationship, often leading to the dismissal of divorce proceedings.

  • Example: A husband and wife had been living separately for a year and had initiated divorce proceedings. However, after attending marriage counseling, they decided to move back in together and committed to rebuilding their marriage. The court subsequently dismissed their divorce petition due to their reconciliation.
  • Explanation: Here, reconciliation signifies the couple's decision to end their separation and fully restore their marital union, which has direct legal implications for their divorce case.

• In financial or accounting contexts, reconciliation is the process of comparing two sets of financial records to ensure they match and to identify any differences, often by accounting for outstanding transactions.

  • Example: A small business owner regularly performs a bank reconciliation by comparing the transactions listed on their monthly bank statement with the entries in their internal accounting software. This process helps them identify any checks that haven't cleared, deposits that are still in transit, or bank fees they might have missed, ensuring their records accurately reflect their cash balance.
  • Explanation: This example demonstrates reconciliation as a methodical process of aligning two distinct financial records (the bank's and the business's) to ensure accuracy and identify discrepancies, bringing them into agreement.