A Latin term that means “from the beginning”, “from the start”, “from the first act”, or “from scratch” . More specifically, it marks the time from which a legal document or agreement comes into force. For example, when a financial contract is declared void ab initio, neither party can realize any expected interest associated with its contractual rights. Likewise, a buyer is said to be in violation of contract terms ab initio if the seller has delivered the goods and the buyer doesn’t pay the purchase price (in which case, the seller may terminate the contract).