Declaratory Judgment

When you were a kid and got in disputes with your brothers or sisters, your parents would step in if the disagreement started to get out of hand (like if hair started getting pulled, or Lucky Charms started getting thrown). Most of the time, this would involve a kind of declaratory judgement: "Now, Sally, it's true that the rocking horse is your toy, but the rule on sharing is that if you're not using it, Timmy can play with it."

A similar process happens as we get older and get into business. In the business world, the mommies and daddies turn into judges and the "sharing rule" becomes the fine points of legal contracts.

In grown-up terms, a declaratory judgement takes place when a court decides the obligations of parties in a disagreement. It clarifies fuzzy points that the litigants have disagreed about. It's not a verdict, per se, because it doesn't assign damages, but it delivers a ruling on a point of disagreement and can therefore effectively decide a case, depending on the circumstance.