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Last edited 16 Oct 2020
In its broadest sense, the word 'liability' refers to a responsibility placed on someone, or something that places them at a disadvantage.
Liability has a number of more specific meanings, depending on the context in which it is used:
- A legal liability is a legally-bound obligation to pay debts or fulfill other obligations.
- A public liability is part of the law of tort which focuses on civil wrongs. See Tort and Public liability insurance for more information.
- Financial liability refers to the financial responsibilities one entity has to another, such as; borrowing to improving a business, or a transaction or other event that has already occurred but has not been paid for. Financial liabilities might be current (i.e. wages, taxes, accounts payable, and so on), or long-term (i.e. long-term bonds, long-term leases, pension obligations, and so on).
More detailed examples include:
- Defects liability. See defects liability period for more information.
- Liability for building design.
- Defective premises liability. See Defective premises - liability and measure of damages for more information.
- Joint and several liability.
- Architects liability.
- Vicarious liability
- Employers’ liability. See Employers’ liability insurance for more information.
- Strict liability.
NB The UN Procurement Practitioner's Handbook, produced by the Interagency Procurement Working Group (IAPWG) in 2006 and updated in 2012 defines liability as: ‘Any obligation incurred as a result of law, rule or agreement; being legally obliged and responsible; a debt or an obligation to another party.’
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