Liability refers to a legal responsibility or obligation that a person or a company has. It means being held accountable for something, like a debt or a duty.

Think of it this way: Imagine you borrowed money from a friend to buy a new bike. Now, you have a liability to your friend because you owe them that money. It's your responsibility to repay the loan. If you don't fulfill this obligation, your friend may take legal action against you to collect the debt.

Similarly, companies also have liabilities. For example, if a company borrows money from a bank to expand its business, it creates a liability to the bank. The company has a legal responsibility to repay the loan as per the agreed terms and conditions. In simple terms, liability means being responsible for fulfilling a legal obligation or being accountable for something, like debts, duties, or obligations.

https://www.dbm.academy/faq for more blockchain vocabulary.

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