Definition of 'Joint Liability'
An obligation, including an obligation to repay a debt between two or more parties. A joint liability allows parties to share the risks associated with taking on additional debt, and to protect themselves in the event of legal litigation and lawsuits.
Investopedia explains 'Joint Liability'
A joint liability for a debt is the result of two or more parties applying jointly for credit as co-borrowers, which is implied in a general partnership. Under the regulations of a general partnership, any partner entering into a contract with or without the knowledge of other partners automatically binds all partners to that contract.
A co-signer of a loan or another debt obligation also has joint liability for a debt; however, this is contingent upon default by the borrower.