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Liability

ly-uh-BIL-uh-tee /ˌlaɪəˈbɪləti/

nounC1GREGMATTOEFLIELTS

FormalLegalBusiness

The state of being responsible for something, especially by law. In finance, debts or financial obligations.

A 'liability' is a legal or financial obligation. It can be a debt owed, a responsibility for damages, or a potential disadvantage. In accounting, it's what a company owes.

The story behind the word. The word 'liability' comes from the Latin verb 'ligare,' meaning 'to bind.' Think of a 'liability' as something that 'binds' you, whether it's a legal obligation, a debt, or a responsibility. This sense of being tied to an outcome or a payment has been present in the word's history since its earliest uses.

Word relationships

Debt: A sum of money that is owed or due.
Obligation: An act or course of action to which a person is morally or legally bound; a duty or commitment.
Responsibility: The state or fact of being accountable or to blame for something.

Asset: A useful or valuable thing or person; an item of property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.
Advantage: A condition or circumstance that puts one in a favorable or superior position.

Commonly confused with

Debt: All 'debts' are 'liabilities,' but not all 'liabilities' are 'debts.' For example, a potential lawsuit is a liability but not a debt until a judgment is made.

Word family

liable (adjective): Responsible by law; legally answerable.

Collocations

legal liability
financial liability
limited liability
product liability
tax liability
assume liability

Example sentences

"The company's balance sheet showed significant liabilities, including long-term debt and accounts payable." Business accounting.
"The driver was found to have full liability for the accident, and his insurance would cover the damages." Legal responsibility.

Memory hook

LIABILITY sounds like 'tie-ability' – you are 'tied' to a responsibility or debt. LIABILITY = TIE

When not to use

Avoid using 'liability' to mean simply a disadvantage or drawback in informal speech if a clearer word like 'disadvantage' or 'weakness' exists. Reserve it for formal contexts of legal or financial obligation.

Fun facts

The word 'ligament' (a band of fibrous tissue connecting bones) also shares the same 'ligare' root, literally meaning 'that which binds'.