Wiktionary
n. An assumption, not necessarily true, made by a court in order to apply a legal rule.
Wikipedia
A legal fiction is a fact assumed or created by courts which is then used in order to apply a legal rule. Typically, a legal fiction allows the court to ignore a fact that would prevent it from exercising its jurisdiction, by simply assuming that the fact is different. This is the case with the Bill of Middlesex where the Court of King's Bench could only exercise jurisdiction over cases which took place in the historic English county of Middlesex. To allow the Court, which was the central court of the land, to take jurisdiction over other cases, parties began to plead that, along with the other facts, there had also been a trespass which occurred in Middlesex. This allowed the King's Bench to rule on the whole of the case.
Legal fictions are different from Legal Presumptions which assume a certain state of facts until the opposite is proved, such as the presumption of legitimacy. They are different from hypothetical examples, such as the 'reasonable person' which serve as tools for the court to express its reasoning. They are also different from legal principles which create a legal state of affairs that is different from the underlying facts, such as corporate personality although these are sometimes wrongly called legal fictions.
The term "legal fiction" is not usually used in a pejorative way, and has been likened to scaffolding around a building under construction.
Usage examples of "legal fiction".
At first be had trouble realizing that anyone could think that this legal fiction would apply to Mars.
Chain-of-command, for example, would have been a legal fiction out in the farbeyond, the wishes of Betan HQ a matter for speculation and side bets.
The status of these and other orbitals became highly fluid, in legal fiction and in fact.
I meant only that if you are forced into this marriage, it can be the legal fiction he wishes it to be, or wished it to be at first.
He insisted on a bonus being paid, regardless, which his lawyers had some trouble finding a legal fiction to fit.