a liability which will only arise upon the happening of a certain event, for example, the guarantor of a loan being asked to honour the guarantee if the borrower defaults. Glossary of Business Terms
————
A debt or obligation that becomes a liability only when something else happens. For example, a guarantor becomes liable for his guarantee only if the debt that is guaranteed does not get paid by the debtor. American Banker Glossary
* * *
A charge that a business expects to pay, contingent on future events.
* * *
contingent liability UK US noun [C] (plural contingent liabilities) (also contingency liability)
► ACCOUNTING a debt which may occur in the future if particular events or situations happen, and which is included in a company's financial records: »
The company had kept its shareholders informed about the risk of losing the appeal and had carried the £7m as a contingent liability in its accounts.
Financial and business terms. 2012.