Derivative Liability
/ˈdɛrɪvətɪv laɪəˈbɪlɪti/
Definitions
- (n.) Legal responsibility that arises indirectly through another party's actions rather than through one's own conduct.
The corporation faced derivative liability for the actions of its subsidiaries.
- (n.) Liability imposed on a party due to the torts or crimes committed by an agent or representative under the doctrine of respondeat superior or piercing the corporate veil.
The employer was held liable under derivative liability for the employee's misconduct.
Related terms
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Commentary
Derivative liability often requires establishing a principal-agent or similar relationship and differs from direct liability by basing responsibility on another's actions rather than the defendant's own.
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.