Legal liability
Encyclopedia
Legal liability is the legal bound obligation to pay debts.
- In lawLawLaw is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
a person is said to be legally liable when they are financially and legally responsible for something. Legal liability concerns both civil lawCivil law (common law)Civil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim...
and criminal lawCriminal lawCriminal law, is the body of law that relates to crime. It might be defined as the body of rules that defines conduct that is not allowed because it is held to threaten, harm or endanger the safety and welfare of people, and that sets out the punishment to be imposed on people who do not obey...
. See Strict liabilityStrict liabilityIn law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability...
. Under English lawEnglish lawEnglish law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, with the passing of the Theft Act 1978Theft Act 1978The Theft Act 1978 is an Act of the Parliament of the United Kingdom. It supplemented the earlier deception offences contained in sections 15 and 16 of the Theft Act 1968 by reforming some aspects of those offences and adding new provisions...
, it is an offense to evade a liability dishonestly. Payment of damagesDamagesIn law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
usually resolved the liability. Vicarious liabilityVicarious liabilityVicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability...
arises under the common law doctrine of agencyAgency (law)The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...
– respondeat superiorRespondeat superiorRespondeat superior is a legal doctrine which states that, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment...
– the responsibility of the superior for the acts of their subordinate. - In commercial lawCommercial lawCommercial law is the body of law that governs business and commercial transactions...
, limited liabilityLimited liabilityLimited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...
is a form of business ownership in which business owners are legally responsible for no more than the amount that they have contributed to a venture. If for example, a business goes bankrupt an owner with limited liability will not lose unrelated assets such as a personal residence (assuming they do not give personal guarantees). This is the standard model for larger businesses, in which a shareholder will only lose the amount invested (in the form of stock value decreasing). For an explanation see business entity. - Manufacturer's liability is a legal concept in most countries that reflects the fact that producers have a responsibility not to sell a defective product. See product liabilityProduct liabilityProduct liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause...
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