Contingency

Finance allah shmoop what is contingent liability All right you

know what a liability is right It's a debt it's

a promise you've made that you need to fulfill teo

pay someone and fulfilling it can be done with cash

or ah promise of delivering inventory or after you've sold

the home to the joneses An interesting family with oddly

large foreheads you know delivering good title to the home

to them right So you're fulfilling liability of producing your

home so what's a contingent liability Well think of it

is a call option or a put option on a

security A contingent liability is a derivative of some other

underlying being like another liability Well the most common contingent

liability would be a filed lawsuit that is more than

just an ambulance chasing securities lawyer hoping to get a

quick five hundred grand to go away google might be

willing to pay three billion dollars toe by ring That

wireless doorbell company started by some weirdo contingent upon ring

properly defending its lawsuit from honeywell which claims that they

own the patents on the process while the financial outcome

of that lawsuit is a contingent liability to the company

Ring and the outcome of the joneses moving into town

well is a worldwide dominance and the enslavement of all

human I mean that's what's at stake their people But 00:01:31.39 --> [endTime] not least they keep their front lawn looking nice