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What is Legal Risk?

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Legal risk is the potential for losses due to regulatory or legal action. There are several major types of legal risk:

1. Regulatory Risk

A risk of changes to regulations that result in new compliance costs.

2. Compliance Risk

The potential for fines and penalties for an organization that fails to comply with laws and regulations.

3. Contract Risk

The potential for a partner, customer or supplier to fail to meet the terms of a contract resulting in losses. Contract risk can also result from your failure to meet the terms of a contract resulting in penalties or legal disputes.

4. Non-contractual Rights

The potential for a third party to infringe on its non-contractual obligations to you. For example, a competitor who infringes on your patents.

5. Non Contractual Obligations

The potential for you to infringe on a third party's rights such as trademarks or patents resulting in legal costs and penalties.

6. Dispute Risk

The potential for a legal dispute to arise as a result of your business activities.

7. Reputational Risk

The potential a decline in reputation due to legal actions. For example, if regulators charge a company for breaking the law the company may lose customers, employees and investors due to damage to its reputation.


This is the complete list of articles we have written about risks.
AI Risk
Risk Avoidance
Brand Risk
Budget Risk
Business Risks
Change Risk
Compliance Risk
Concentration Risk
Cost Risk
Country Risk
Credit Risk
Demand Risk
Dread Risk
Economic Risk
Exchange Rates
Existential Risk
External Risk
Financial Risk
Force Majeure
Good Risk
Human Error
Risk Identification
Infinite Risk
Inflation Risk
Inherent Risk
Interest Rates
Internal Risks
Investing Risk
Legal Risk
Liquidity Risk
Model Risk
Moment Of Risk
Natural Disasters
Negative Risk
Operations Risk
Passive Risk
Personal Risk
Political Risk
Process Risk
Procurement Risk
Product Risk
Project Risk
Pure Risk
Quality Risk
Recession Risk
Risk Mitigation
Refinancing Risk
Regulatory Risk
Reputational Risk
Residual Risk
Resource Risk
Revenue Risk
Risk Appetite
Risk Aversion
Risk Examples
Risk Management
Risk Management Process
Risk Matrix
Risk Meaning
Risk Measurement
Risk Taking
Risk Tolerance
Risk Triggers
Risk vs Issue
Risk vs Opportunity
Risk vs Uncertainty
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Security Risk
Settlement Risk
Risk Sharing
Speculative Risk
Strategic Risk
Strategy Risk
Supply Risk
Systemic Risk
Tactical Risk
Taxation Risk
Technology Risk
Risk Transfer
Unforced Error
Upside Risk
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Compliance Risk

The definition of compliance risk with examples.

Business Risks

A list of common business risks.

Risk Treatment

The five things that can be done about risk.

Risk Mitigation

A list of techniques for reducing risk.

Positive Risk

The potential that you'll achieve too much of a good thing.

Dread Risk

Any risk that people have a strong aversion too.

Risk vs Opportunity

The surprising similarities between risk and opportunity.

Risk Management vs Contingency Planning

The difference between risk management and contingency planning.


The common types of uncertainty in decision making and strategy.

Inventory Risk

The common types of inventory risk.

Business Risk Management

An overview of common business risk management techniques.


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