{"ok":true,"canonical_url":"https://dealroom.so/glossary/contingent-liabilities","api_url":"https://dealroom.so/api/public/glossary/contingent-liabilities","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"contingent-liabilities","term":"Contingent liabilities","group":"Reading the business","definition":"These are potential financial obligations that depend on the outcome of a future event, like a pending lawsuit or product warranty claim. They aren't current debts but could become liabilities.","what_it_means":"During due diligence, you must identify any contingent liabilities the business faces. These can significantly impact the business's future cash flow and valuation if they materialize. Work with your attorney to assess the risk and consider escrow or holdback arrangements to protect yourself.","url":"https://dealroom.so/glossary/contingent-liabilities","official_sources":[],"related":[{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"},{"slug":"escrow-holdback","term":"Escrow / holdback","url":"https://dealroom.so/glossary/escrow-holdback"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"omission-of-material-facts","term":"Omission of material facts","url":"https://dealroom.so/glossary/omission-of-material-facts"}],"related_questions":[{"question":"What happens if the business being acquired has significant outstanding tax liabilities at closing?","url":"https://dealroom.so/for-lenders/questions/what-happens-if-the-business-being-acquired-has-significant-outstanding-tax-liabilities-at"},{"question":"What if the business I want to acquire has undisclosed liabilities discovered during due diligence?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-want-to-acquire-has-undisclosed-liabilities-discovered-during-due-d"},{"question":"Does finding significant undisclosed liabilities during due diligence kill an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/does-finding-significant-undisclosed-liabilities-during-due-diligence-kill-an-sba-7-a-acqu"},{"question":"If multiple owners each guarantee the loan, are their liabilities typically joint and several or individual?","url":"https://dealroom.so/sba-7a/questions/if-multiple-owners-each-guarantee-the-loan-are-their-liabilities-typically-joint-and-sever"},{"question":"Can unreported tax liabilities discovered during due diligence from the seller's business kill my acquisition loan?","url":"https://dealroom.so/sba-7a/questions/can-unreported-tax-liabilities-discovered-during-due-diligence-from-the-seller-s-business-"},{"question":"Can I purchase a business with an SBA 7(a) loan if it has significant environmental liabilities?","url":"https://dealroom.so/sba-7a/questions/can-i-purchase-a-business-with-an-sba-7-a-loan-if-it-has-significant-environmental-liabili"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Contingent liabilities","url":"https://dealroom.so/glossary/contingent-liabilities","source_type":"DealRoom Data"}}