Externality
/ɪkˌstɜːrˈnælɪti/
Definitions
- (n.) A cost or benefit caused by a party that affects others who did not choose to incur that cost or benefit, often justifying legal regulation or intervention.
Pollution from a factory is a negative externality that harms nearby residents.
Forms
- externality
- externalities
Related terms
Commentary
Externalities commonly arise in environmental law and economic regulation; legal rules often aim to internalize these costs or benefits to align private incentives with social welfare.
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.