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Legal Definitions - short-term loan

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Definition of short-term loan

Show Cause

"Show cause" is a legal term referring to an order issued by a court or administrative body that requires an individual or entity to present a satisfactory explanation, justification, or legal reason for why a particular action should not be taken, or why a certain condition should not be allowed to continue. Essentially, it places the burden on the recipient of the order to demonstrate to the court why they should not proceed with a proposed action, or why they should not be subject to a specific penalty or ruling.

  • Example 1: Contempt of Court

    A witness who was subpoenaed to testify in a trial fails to appear in court on the designated date without providing any prior notice. The judge might then issue an order requiring the witness to "show cause" why they should not be held in contempt of court for their non-appearance.

    Explanation: In this scenario, the court is demanding that the witness provide a valid and satisfactory reason or excuse for their absence. If they fail to "show cause" (i.e., provide a good enough explanation), they could face penalties for disrespecting the court's authority.

  • Example 2: Professional License Revocation

    A state licensing board receives a complaint alleging that a doctor has engaged in professional misconduct. Before revoking the doctor's medical license, the board might issue an order for the doctor to "show cause" why their license should not be suspended or revoked.

    Explanation: Here, the licensing board is giving the doctor an opportunity to present their defense, evidence, or explanation to counter the allegations and convince the board that their license should remain active. The burden is on the doctor to justify why they should retain their professional privileges.

  • Example 3: Enforcement of a Judgment

    A creditor obtains a court judgment against a debtor for an unpaid debt. If the debtor fails to comply with the judgment (e.g., by not making payments), the creditor might ask the court to issue an order for the debtor to "show cause" why the judgment should not be enforced through wage garnishment or asset seizure.

    Explanation: This illustrates "show cause" because the debtor is being compelled to provide a legal reason or explanation (e.g., they have already paid, they have filed for bankruptcy, there was an error in the judgment) to prevent the creditor from taking further action to collect the debt.

Simple Definition

A short-term loan is a type of loan that must be repaid within a relatively brief period, typically less than one year. It involves a lender providing funds to a borrower, who agrees to return the principal amount plus any agreed-upon interest by the specified due date.