Allocation of Risk
/ˌæləˈkeɪʃən əv rɪsk/
Definitions
- (n.) The contractual provision assigning potential risks and liabilities between parties.
The allocation of risk clause specified who would bear the cost of unforeseen damages.
- (n.) The process by which courts or tribunals determine which party is responsible for certain risks in a dispute.
The court's allocation of risk favored the plaintiff in the case of the defective product.
Forms
- allocation of risk
- allocation of risks
Related terms
See also
Commentary
Allocation of risk clauses are critical in contracts to clearly delineate responsibility and limit litigation; precise drafting ensures predictable outcomes.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.