Financial Liability
/ˌfaɪˈnænʃəl lɪəˈbɪləti/
Definitions
- (n.) A monetary obligation recognized by law, requiring one party to pay an amount to another, typically arising from contracts, torts, or statutory duties.
The company's financial liability increased due to the breach of contract.
- (n.) An obligation on the balance sheet representing debts or monetary commitments owed by an entity.
Financial liabilities must be disclosed in a firm's annual report.
Forms
- financial liability
- financial liabilities
Related terms
See also
Commentary
Financial liability is a foundational concept in both contract and corporate law; drafters should specify the source and nature of such liability to avoid ambiguity.
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.