In terrorem

In terrorem, Latin for "in [order to] frighten," is a legal term used to describe a warning, usually one given in hope of compelling someone to act without resorting to a lawsuit or criminal prosecution. For example, many intellectual property attorneys send "in terrorem" letters, which threaten litigation absent compliance with the written request, to persons that are violating their clients' trademark rights before resorting to court proceedings.

In terrorem Clauses (referred to in English as No-contest clauses) are also used in wills to keep beneficiaries from contesting the will by either completely disinheriting them from any share, or reducing their share to a nominal amount. These clauses are not uniformly recognized, or in some states such as New York, are unnecessary.

The term was used in the recent U.S. Supreme Court decision in "BELL ATLANTIC CORP. ET AL. v. TWOMBLY ET AL." (known as "Twombly")CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT No. 05–1126. Argued November 27, 2006—Decided May 21, 2007(available at http://www.supremecourtus.gov/opinions/06pdf/05-1126.pdf):

The requirement of allegations suggesting an agreement serves the practical purpose of preventing a plaintiff with “ ‘a largely groundless claim’ ” from “ ‘tak [ing] up the time of a number of other people, with the right to do so representing an "in terrorem" increment of the settlement value.’ ” (quoting BLUE CHIP STAMPS v. MANOR DRUG STORES, 421 U.S. 723). In other words, the Court worried that the threat of an expensive lawsuit (that was ultimately groundless) would nevertheless encourage settlements, and thus payments by innocent defendants, particularly in the case of antitrust lawsuits, which have a long and very expensive discovery process.