Sunk Cost Fallacy
/ˈsʌŋk kɒst ˈfæləsi/
Definitions
- (n.) A logical error where one continues a course of action due to previously invested resources rather than future benefits.
The court recognized the sunk cost fallacy in the company's insistence on completing the costly project despite diminishing returns.
Commentary
The sunk cost fallacy is often cited in legal discussions involving contract termination or business decisions to highlight irrational financial commitments.
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.