Definition
COST carries three distinct legal meanings depending on context. Researchers should identify which sense controls before interpreting a source.
1. Litigation costs (costs of court). Expenses of a legal proceeding that a court may order the losing party to pay the prevailing party. These are procedural charges — filing fees, service fees, transcript costs, and similar expenses — not attorney's fees, unless a statute or contract expressly provides otherwise. This is the dominant legal meaning.
2. Purchase price / cost price. The actual price paid for goods or property, including all incidental charges paid at the point of origin. In export contexts, cost means the price paid plus every incidental charge paid at the place of exportation. Cost price, by contrast, is stripped down to the actual sum paid — no additions.
3. Tax and accounting basis. In tax law and commercial contexts, cost is the amount paid to acquire property, used to determine gain or loss on disposition. This sense overlaps with cost price but carries specific statutory definitions that govern depreciation, basis calculations, and cost-sharing arrangements.
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Common Language
Modern common usage (Wiktionary): To incur a charge of; to require payment of a specified price. Also used transitively — to cause expenditure or loss.
Historical common usage (Webster's 1913): Webster's 1913 does not offer a useful primary entry for cost in the economic sense; its listed definition refers to an obsolete meaning of "cost" as a rib, side, or region (from Middle English). The economic sense was in common use by 1913 but was not captured in the excerpted entry.
Editorial note: The common verb sense — "the item costs ten dollars" — maps loosely onto legal meanings 2 and 3 but creates a dangerous imprecision in litigation. A lay reader encountering an order awarding "costs" assumes money spent generally; the legal term is strictly confined to taxable court expenses enumerated by statute or rule. Attorney's fees are excluded unless separately authorized. That gap produces consistent misunderstanding among non-lawyers reading judgments.
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Common Confusion
COSTS vs. ATTORNEY'S FEES: In litigation, these are legally distinct categories. Costs are taxable court expenses (filing fees, deposition transcripts, witness fees, and similar items enumerated in statutes like 28 U.S.C. § 1920). Attorney's fees are not costs unless a fee-shifting statute, contract, or court rule expressly includes them. Many non-lawyers — and some older authorities — use "costs" loosely to mean all litigation expenses. Check whether a source uses the term precisely before relying on it.
COST vs. COST PRICE: The historical dictionaries distinguish these. Cost in the export context includes incidental charges on top of the purchase price. Cost price means only the actual amount paid. In modern accounting and tax contexts, the term basis often displaces both, but the older distinction survives in commercial law and insurance valuation disputes.
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Recognized Forms
/SUBTYPES
Costs of court (litigation costs): Taxable expenses awarded to a prevailing party under procedural rules. Subject to a court's discretion within statutory limits.
Cost price: The actual sum paid for goods, without additions for incidental charges.
Cost of exportation: Price paid plus all incidental charges at the place of exportation — the operative definition in export valuation and trade law.
Tax basis / cost basis: The acquisition cost of property as defined under the Internal Revenue Code, used for gain/loss computation and depreciation.
Response costs (environmental law): Under CERCLA, the amounts expended to investigate and remediate contaminated property. A distinct legal term of art with its own liability and recovery framework.
Cost-book: A historical term from mining law referring to a register kept by adventurers sharing a lode-working enterprise, recording each member's proportionate share of expenses. Appears in 19th-century English mining and company law.
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Why It Matters in Research
The term cost is one of the most context-dependent words in the legal corpus. A researcher who does not anchor the sense to the subject matter will consistently misread sources.
In civil procedure research, cost has a precise, constrained meaning. Federal Rule 54(d) creates a presumption in favor of awarding costs to the prevailing party, but the universe of allowable costs is defined by 28 U.S.C. § 1920. Historical sources predate this statutory framework; when reading 19th-century cases on costs, the enumerated categories will differ from modern practice, and the treatment of attorney's fees as costs varies by jurisdiction and era.
In historical commercial sources, cost and cost price appear most often in export documentation, insurance valuation, and commercial invoice disputes. The distinction between cost (with incidentals) and cost price (bare purchase price) was commercially significant and litigated frequently. Researchers working on historical trade, customs, or insurance disputes should not assume modern interchangeability.
In tax research, cost as basis is a statutory concept. The common-law and commercial-law senses of cost are not transplantable into tax analysis without checking the applicable Code provisions and regulations. Cost-sharing payments in agricultural and environmental programs carry their own exclusion rules — see the Tax Encyclopedia entry — and should not be analyzed under general cost principles.
In environmental law, response costs under CERCLA are a term of art governing Superfund liability. The word cost here triggers a specific federal liability and cost-recovery framework that has no meaningful overlap with litigation costs or purchase price meanings.
Trap for historical researchers: The cost-book entry in Black's (2nd Ed.) refers to a mining law concept — a register of adventurers sharing expenses in a lode-working enterprise. This usage is archaic and appears only in 19th-century English mining law contexts. It will not appear in American practice after the early 20th century.
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Historical Dictionary Support
The historical dictionaries show reasonable agreement on the commercial meanings of cost and cost price, anchoring both to the price-paid principle. Bouvier and Anderson track Black's closely on the exportation definition. All three treat cost price as the bare actual price paid, without additions.
Black's 2nd Ed. is the most useful of the historical sources because it supplies an actual citation — Goodwin v. U.S. for the exportation definition and Buck v. Burk for cost price — allowing researchers to verify the propositions against primary authority rather than relying on dictionary assertion alone.
What the historical dictionaries largely omit is the litigation-costs meaning, which was the dominant legal usage by the time these dictionaries were compiled. The entries focus on commercial valuation rather than procedural costs. This reflects editorial choices about what required definition rather than the absence of a legal meaning — courts were awarding costs of suit throughout the 19th century, but the concept was treated as self-evident in practice.
The cost-book entry in Black's 2nd Ed. is a curiosity worth noting for mining law researchers but has no modern application.
None of the historical dictionaries address the tax-basis sense of cost, which developed through 20th-century revenue legislation and would not appear in any pre-20th-century source.
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Jurisdictional Note
Litigation costs vary significantly by jurisdiction. Federal courts follow the statutory framework of 28 U.S.C. § 1920 and Rule 54(d). State courts operate under their own cost statutes, which define allowable items differently — some states include expert witness fees; federal courts generally do not as a matter of course. International commercial transactions may define cost according to Incoterms (ICC trade definitions) rather than common-law cost-price principles.
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Encyclopedia Cross-Reference
civpro_142: Costs and Taxation of Costs — Rule 54(d) and 28 USC 1920 (The Law Mind Civil Procedure & Evidence Encyclopedia) — primary reference for litigation costs in federal practice.
admin_135: CERCLA (Superfund) — Liability, Cleanup, and Cost Recovery (The Law Mind Administrative Law & Government Encyclopedia) — governs response costs in environmental cleanup litigation.
tax_54: Exclusions — Certain Cost-Sharing Payments (The Law Mind Tax Encyclopedia) — relevant to cost-sharing arrangements and their tax treatment.
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