Legal liability


Legal liability
Accountancy
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Legal liability is the legal bound obligation to pay debts.[1]

  • In law a person is said to be legally liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft Act 1978, it is an offense to evade a liability dishonestly. Payment of damages usually resolved the liability. Vicarious liability arises under the common law doctrine of agencyrespondeat superior – the responsibility of the superior for the acts of their subordinate.
  • In commercial law, limited liability is a form of business ownership in which business owners are legally responsible for no more than the amount that they have contributed to a venture. If for example, a business goes bankrupt an owner with limited liability will not lose unrelated assets such as a personal residence (assuming they do not give personal guarantees). This is the standard model for larger businesses, in which a shareholder will only lose the amount invested (in the form of stock value decreasing). For an explanation see business entity.
  • Manufacturer's liability is a legal concept in most countries that reflects the fact that producers have a responsibility not to sell a defective product. See product liability.

References

  1. ^ Sullivan, Arthur; Steven M. She (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 187. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4. 

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Look at other dictionaries:

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  • Liability — A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation. The New York Times Financial Glossary * * * liability li‧a‧bil‧i‧ty [ˌlaɪəˈbɪlti] noun liabilities PLURALFORM …   Financial and business terms


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