A Contingent Liability Is a Liability That May Materialize in the Future

question 9

True/False

A contingent liability is a liability that may materialize in the future because of something that happened in the past.

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Definitions:

Frustration of Contract

A legal doctrine that permits the termination of a contract when an unforeseen event renders contractual obligations impossible, or radically changes the party's principal purpose for entering into the contract.

Complications

Problems or difficulties that arise which make a situation harder to deal with or resolve.

Prudent Businessperson

An individual who exercises care, diligence, and wisdom in making business decisions, similarly to how a reasonable person would act under comparable circumstances.

Specific Performance

A legal remedy requiring a party to perform a specific act, often the completion of a contract, rather than paying damages for non-performance.