liability


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liability,

in law, an obligation of one party to another, usually to compensate financially. It is a fundamental aspect of torttort,
in law, the violation of some duty clearly set by law, not by a specific agreement between two parties, as in breach of contract. When such a duty is breached, the injured party has the right to institute suit for compensatory damages.
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 law, although liability may also arise from duties entered into by special agreement, as in a contractcontract,
in law, a promise, enforceable by law, to perform or to refrain from performing some specified act. In a general sense, all civil obligations fall under tort or contract law.
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 or in the carrying out of a fiduciaryfiduciary
, in law, a person who is obliged to discharge faithfully a responsibility of trust toward another. Among the common fiduciary relationships are guardian to ward, parent to child, lawyer to client, corporate director to corporation, trustee to trust, and business
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 duty. Liability is not always the result of an intentionally damaging act or of some proven fault like negligencenegligence,
in law, especially tort law, the breach of an obligation (duty) to act with care, or the failure to act as a reasonable and prudent person would under similar circumstances.
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. The affixing of liability may once have been simply a peace-preserving alternative to the practice of an injured party taking vengeance. Further, the law's emphasis has long been that one who is able to pay (who, in modern terms, has "deep pockets") should pay one who has lost something through an action of the payer, even if that action was blameless.

Vicarious liability is the duty of a principal, e.g., an employer, to pay for losses occasioned by the acts of an agent, e.g., an employee. Strict liability, under which those engaging in certain undertakings (e.g., such "ultrahazardous" practices as the industrial use of high explosives) are held responsible for injury without inquiry into fault, has been increasingly imposed by courts and by statute in the 19th and 20th cent. One response has been the growth of the liability insurance industry, offering such coverage as physicians' malpracticemalpractice,
failure to provide professional services with the skill usually exhibited by responsible and careful members of the profession, resulting in injury, loss, or damage to the party contracting those services.
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 insurance. An area that has been the focus of much litigation, legislation, and debate in recent decades is product liability, under which heavy strict liability costs have been imposed on makers of such varied items as foods, drugs, cosmetics, and automobiles.

References in periodicals archive ?
Management teams can select one or more of the following coverage parts on a shared or separate limits basis: directors, officers and entity liability; employment practices liability; fiduciary liability; and crime (soon to be released).
Treasury and the Service, however, believe that applying the presumption of deemed satisfaction to a disregarded entity that shields a Federal tax partner from liability for the entity's obligation would, in many cases, cause partnership liabilities economically indistinguishable from nonrecourse liabilities to be classified as recourse under Sec.
The Parmalat cases illustrate agency liability. The investors pointed out that, in connection with revelations of fraud at Parmalat, Grant Thornton International (GTI) disciplined partners at the Italian firm and ultimately expelled the Italian firm from the alliance.
In the following example, fixed-site environmental liability insurance enabled an owner to sell a contaminated property at fair market value.
1) At year-end, all events have occurred establishing the fact of the liability and the amount can be determined with reasonable accuracy;
Consider asking the third party service provider for additional insured status on their fiduciary liability.
In an area such as directors and officers liability, the stakes can be especially high.
City of Boca Raton, (16) retaining the vicarious liability standard for the harassing conduct engaged in by supervisory employees but bringing an end to consideration of the type of harassment as determining whether the employer may assert a defense to liability.
In addition to personal liability of directors, a court of equity may enjoin the transaction in question.
On the other hand, FAS 5 provides a better approach for making the proper determination of an additional liability. Although enterprises may adopt different approaches to determining the amount of loss to accrue under FAS 5, the consistent objective is to estimate the amount of tax benefit that will be confirmed on resolution of a challenged tax position.
The seller of a facility with compliance problems will usually want to negotiate the allocation of liability, especially when the purchase price is low.