{"ok":true,"canonical_url":"https://dealroom.so/glossary/contingent-liability","api_url":"https://dealroom.so/api/public/glossary/contingent-liability","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-liability","term":"Contingent Liability","group":"Reading the business","definition":"A contingent liability is a potential future financial obligation that depends on the outcome of a future event. It's not a definite debt yet, but could become one.","what_it_means":"During due diligence, look for contingent liabilities like pending lawsuits, unresolved tax audits, or product warranty claims. These liabilities aren't on the balance sheet as definite debts but could become significant costs post-acquisition. Understand the potential impact and negotiate protections like an escrow.","url":"https://dealroom.so/glossary/contingent-liability","official_sources":[],"related":[{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"escrow-holdback","term":"Escrow / holdback","url":"https://dealroom.so/glossary/escrow-holdback"},{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"}],"related_questions":[]},"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 Liability","url":"https://dealroom.so/glossary/contingent-liability","source_type":"DealRoom Data"}}