legal risk

Legal risk refers to the possibility of facing legal actions or consequences due to actions, decisions, or contractual obligations. It can arise from non-compliance with laws, regulations, or contractual terms, leading to lawsuits, fines, or penalties. Businesses and individuals may experience legal risk in various areas, such as employment practices, product liability, or intellectual property disputes. Managing legal risk typically involves understanding the law, implementing compliance practices, and taking proactive steps to minimize exposure to potential legal issues, thereby protecting oneself or the organization from unforeseen liabilities and costs.