ERM Glossary: Legal risk
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Legal risk is often viewed as having 3 elements:
Risks involved in failing to adhere to
legislation/regulation, including risks relating to changes in accepted
Risks contained in contracts, particularly ones involving
disputes in interpreting contracts
Risks involving court judgements that give rise to
unexpected outcomes or unanticipated interpretations of legislation or contracts.
These may include litigation between unrelated third parties that create
precedents that may apply to the entity in question.
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