contingent liability(redirected from Secondary Liabilities)
contingent liabilitya 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.
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.