forecast
Definition
A forecast is a financial or business projection that estimates future performance based on current data and reasonable assumptions. In a legal context, businesses often include forecasts in contracts, loan applications, or investment documents to show expected revenue, costs, or growth. Courts and regulators pay close attention to whether your forecasts were honest and reasonable at the time you made them.
Example
If you tell an investor your business will earn $500,000 next year based on your current sales trends and a signed contract with a major client, that is a forecast. If you hit only $300,000, you likely will not face legal trouble as long as your original assumptions were genuine and documented.
Watch Out
Making overly optimistic forecasts to attract investors or secure loans can expose you to fraud claims if those numbers were not grounded in real data.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.