Legal liability is a term applied to being legally responsible for a situation, and is often associated with a contract, especially if the terms of that contract are not fulfilled. In the US, state law often determines the question of liability, after it is applied to certain facts of a case. In some cases, liability may be subject to interpretation by an individual such as a judge, or group of individuals, as in the case of a jury. In cases where the facts are disputed, responsibility becomes a more difficult question.
In most cases, the question of legal liability is a question of civil law, rather than criminal law. If a person fails in his contractual obligations, those who have been wronged may decide to seek a legal remedy. In such cases, the court must agree that responsibility for the situation legally rests with the defendant. Once this is done, an award amount will be set, most likely based on the actual damages and possibly based on punitive damages as well.
To establish liability, several things must be proven. First, it must be proven that the person the plaintiff wants held accountable is the actual party in the contract. Second, it must be proven that the individual did not fulfill a portion of the contract. This failure may or may not be based on ability, depending on the situation. In most cases, the person with the responsibility must at least have the ability to meet the terms of the contract.
One of the most familiar situations in which legal liability is often a prime area of concern is in vehicle accidents. Drivers can be liable to pay the repairs and medical bills of others injured in an accident, if they are deemed at fault. To protect against such large payouts, drivers may carry insurance liability coverage. This insurance often covers the majority of the damages, though the insured usually has to pay at least a portion of the cost.
Business matters are another area where liability can play a large role, especially in sole proprietorships, where individuals can lose personal assets because of such issues. To protect against that, many may choose to incorporate or at least form a business under rules of a limited liability company. In such cases, any breach of contract may affect assets from a company, but not personal property from an individual.
Those who have questions about liability issues should consult an attorney, as these can be complex legal matters. Often, what makes a person liable in one state or jurisdiction may not make a person liable in another. Therefore, it is important to seek the advice of someone who knows the laws of each particular area.