Financial Sophistication
/ˌfaɪˈnænʃəl səˌfɪstɪˈkeɪʃən/
Definitions
- (n.) The extent to which an individual or entity understands and can effectively use financial concepts and instruments in legal or contractual settings.
Courts sometimes assess a party's financial sophistication to determine if they should have understood the risks involved in a complex transaction.
Forms
- financial sophistication
Related terms
See also
Commentary
Financial sophistication affects legal interpretations of consent and the enforceability of agreements involving complex financial products.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.