It means when pleading guilty, the judge agrees and finds that there was a crime committed and the defendant knows it too and is agreeing with it.
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The judge is asking that the prosecutor state the facts surrounding the incident and the basis for the resulting criminal charges. A guilty plea requires a factual and legal basis for a finding of guilt. So does a trial, but there is much more to a trial to come to the same conclusion.
In merry olde England, sometimes the mentally ill would plead to offenses that did not exist. In the United States, we have evolved with a safeguard to prevent against that problem. Specifically, we require at trial that the prosecution proves the corpus delicti. The corpus delicti, is the "body of the crime." So, the prosecution has to prove that the crime occurred and that the defendant is the criminal agent responsible. Likewise, for a plea to be accepted, the court must satisfy itself that the prosecution has a factual and legal basis (stipulated to exist by the defense) for the prosecution and plea. This concludes our legal history lesson of the week. We hope you enjoyed the show.
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For some reason some of the answers presume a guilty plea was being entered, but I don't see that in the question. All crimes have factual components and legal components - the judge is the judge of the legal components; the jury is the judge of the factual component. There must be a certain, properly and sufficiently proven union of facts and law for there to be a conviction. Judges will sometime comment on the reality that whatever facts are being discussed do not add up to a legal basis for a particular crime. Without knowing more about the setting in which the comment was made, I cannot answer more, but I won't jump to any assumptions about what was being discussed.
In order for a Judge to accept a plea to any charge, the Court must determine that the charge in which the person has pled to or is being sentenced to has a factual basis. A factual basis is basically a factual scenario that the acts that constitute the criminal charge were in fact committed by the Defendant. This serves several purposes. First, it prevents the Defendant from claiming in the future that he did not do the things he is alleged to have done because typically the statements are on the record. Second, it ensures that the criminal justice system is just. The Judge's role is to ensure the fair administration of justice. If there is no factual basis to a charge, in other words, the Defendant is pleading guilty to transportation of methamphetamines, but there were no drugs in the underlying case, there would be no factual basis. For the most part, it ensures that people plead guilty to charges that are supported by the facts.
The factual finding is where the judge (or whoever has the responsibility of determining the facts) determines the actual facts relevant to decide a controversy.
The legal basis is the actual law the judge will compare the facts to, in order to determine the outcome.