Enterprise liability

Enterprise liability

Enterprise liability, also known as market-share liability, is a legal doctrine under which individual entities (for example, otherwise legally unrelated corporations or people) can be held jointly liable for some action on the basis of being part of a shared enterprise. Enterprise liability is a form of secondary liability.

For example, suppose high-risk manufacturing activities are shunted into one corporation, while a second "marketing" corporation keeps all the profits. In the case that someone was injured by the manufacturing activity, a court might apply the enterprise liability doctrine to allow recovery from the marketing corporation, which holds all the assets.

The doctrine is examined in "Walkovsky v. Carlton", 223 N.E.2d 6 (N.Y. 1966).


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