contingent liability

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Contingent Liability

A liability that a company may have to pay, but only if a certain future event occurs. Usually, a contingent liability refers to the outcome of a lawsuit: that is, the company may have to pay a significant amount of money if it loses the lawsuit. Contingent liabilities are recorded under accounts payable; their existence may also affect the share price.

contingent liability

An obligation that may result, but is not likely to result because the event causing the obligation is improbable. For example, the award from a lawsuit against a firm is a contingent liability of the defendant if there is little likelihood the plaintiff will recover the award.

contingent liability

a liability which may or may not occur depending upon an uncertain event, for example, the outcome of a court case in which damages are being claimed against a firm.

contingent liability

A liability that is not currently a liability but may become one upon the happening of some future event.If a father guarantees the student housing lease of his son,then the son is liable for the rent but the father may become liable if the son defaults. Other common contingent liabilities are guarantees of the debts of others,potential adverse judgments in litigation,and currently contested tax liabilities or audits. Lenders sometimes request a list of all contingent liabilities when evaluating a borrower's financial strength.

References in periodicals archive ?
The law of patent infringement, a cause of action that is often described as a species of a property tort, (8) incorporates indirect liability provisions.
The example held that the described indirect liability assumption did not disqualify the otherwise qualified C reorganization.
A suitable target for indirect liability is one who can detect and deter another's bad acts and who would be encouraged by a liability rule to "internalize some significant negative externality unavoidably associated with its activities.
The agreement is subject to several conditions, including bankruptcy court approval and the final confirmation of a bankruptcy plan of reorganization for Mac Arthur granting The Hartford a channeling injunction against any further direct or indirect liability for asbestos-related claims against Mac Arthur.
However, last year, attorneys brought two broad class action lawsuits under the ATCA which allege injury based on vicarious or indirect liability.
The second section looks at legal issues for e-business in general, including personal jurisdiction, security, e-signatures, copyrights, trademarks, trade dress, e-mail, indirect liability, business method, software patents, and domain name disputes.
The second section covers the legal issues associated with conducting e-business for any industry, including personal jurisdiction, security, e-signatures, copyright, trademark, trade dress, electronic mail, indirect liability and domain name disputes.
Paul against any direct or indirect liability for asbestos-related claims against the MacArthur Entities.
The district court's choice of language, "cannot be held liable" (210) rather than "does not owe damages," is notable--it suggests an atomistic, particularized conception of indirect liability.
But, as I will argue here, immunity in this instance is hard to defend on policy grounds and it is sharply inconsistent with the conventional logic of indirect liability.
Last month Judge Pointer affirmed an earlier ruling that dismissed Dow Chemical from all indirect liability claims in the litigation.
The agreement is subject to several conditions, including the bankruptcy court approval and the final confirmation of a bankruptcy plan of reorganization for Mac Arthur granting HIG a channeling injunction against any further direct or indirect liability for asbestos-related claims against Mac Arthur.