Definition of Fonds perdus
In French law, a capital is said to be invested a fonds perdus when it is stipulated that in consideration of the payment of an amount as interest, higher than the normal rate, the lender shall be repaid his capital in this manner. The borrower, after paying the interest during the period determined, is free as regards the capital itself.
That's the definition of Fonds perdus in Black's Law Dictionary 6th Edition. Courtesy of Cekhukum.com.