BROWSE

Joint Liability

Definition

Where two or more persons are liable in respect of the same liability, in most common law legal systems they may either be...

What is '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.

Explaining '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.


Further Reading


Joint liability lending and the peer selection effect
academic.oup.com [PDF]
We develop a simple model of group-lending based on peer monitoring and moral hazard. We find that, in the absence of sequential financing or lender monitoring, group-lending schemes may involve under-monitoring with the borrowers investing in undesirable projects …

The impacts of microfinance: Evidence from joint-liability lending in MongoliaThe impacts of microfinance: Evidence from joint-liability lending in Mongolia
www.aeaweb.org [PDF]
We develop a simple model of group-lending based on peer monitoring and moral hazard. We find that, in the absence of sequential financing or lender monitoring, group-lending schemes may involve under-monitoring with the borrowers investing in undesirable projects …

Using repayment data to test across models of joint liability lendingUsing repayment data to test across models of joint liability lending
academic.oup.com [PDF]
We develop a simple model of group-lending based on peer monitoring and moral hazard. We find that, in the absence of sequential financing or lender monitoring, group-lending schemes may involve under-monitoring with the borrowers investing in undesirable projects …

Financing long-distance trade: the joint liability rule and bills of exchange in eighteenth-century FranceFinancing long-distance trade: the joint liability rule and bills of exchange in eighteenth-century France
www.cambridge.org [PDF]
We develop a simple model of group-lending based on peer monitoring and moral hazard. We find that, in the absence of sequential financing or lender monitoring, group-lending schemes may involve under-monitoring with the borrowers investing in undesirable projects …

Joint liability and peer monitoring under group lendingJoint liability and peer monitoring under group lending
www.degruyter.com [PDF]
We develop a simple model of group-lending based on peer monitoring and moral hazard. We find that, in the absence of sequential financing or lender monitoring, group-lending schemes may involve under-monitoring with the borrowers investing in undesirable projects …


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