Claimants can prove liability through a myriad of different theories, known as theories of liability. Which theories of liability are available in a given case depends on nature of the law in question. For example, in case involving a contractual dispute, one available theory of liability is breach of contract; or in the tort context, negligence, negligence per se, respondeat superior, vicarious liability, strict liability, or intentional conduct are all valid theories of liability. Each theory of liability has certain conditions, or elements, that must be proven by the claimant before liability will be established. For example, the theory of negligence requires the claimant to prove that the defendant had a duty; the defendant breached that duty; the defendant's breach caused the injury; and that injury resulted in recoverable damages. Theories of liability can also be created by legislation. For example, under English law, with the passing of the Theft Act 1978, it is an offense to evade a liability dishonestly. Payment of damages usually resolves the liability. A given liability may be covered by insurance. In general, however, insurance providers only cover liabilities arising from negligent torts rather than intentional wrongs or breach of contract.
Liability in Business
In commercial law, limited liability is a business form that shields its owners from certain types of liability and that amount a given owner will be liable for. A limited liability form separates the owner from the business. This means that when a business is found liable in case, the owners are not themselves liable; rather, the business is. Thus, only the funds or property the owner have invested into the business are subject to that liability. If, for example, a limited liability business goes bankrupt, then the owner will not lose unrelated assets, such as a personal residence. This is the standard model for larger businesses, in which a shareholders will only lose the amount invested. There is an exception to this rule, however, which allows a claimant to litigate against the owner of a limited liability business, if the owner have engaged in conduct that justifies the claimant's recovery from the owner: This is known as "piercing the veil."
Additional Concepts
Manufacturer's liability, a legal concept in most countries, reflects the fact that producers have a responsibility not to sell a defective product. Economists use the term "legal liability" to describe the legal-bound obligation to pay debts.