What does the term "liability" refer to in a legal context?

In a legal context, the term "liability" mainly refers to responsibility for one's actions, particularly in terms of legal accountability for harm or damage caused. When an individual or entity is held liable, it means they are legally responsible for a particular obligation or for compensating another party for losses incurred due to wrongful acts or negligence. This responsibility can arise in various situations, such as tort law, where one person's actions may infringe upon the rights of another, leading to a requirement to make restitution or face legal consequences.

The other options, while relevant to legal discussions, do not accurately capture the essence of what liability implies. Ownership of property relates to legal title and rights over physical or intellectual properties. Authority to make contracts pertains to the legal capacity to enter into agreements, and capacity to sue refers to the ability of a party to initiate legal proceedings. Although these concepts may exist within the broader field of law, they do not define "liability" itself, which is centrally concerned with the concept of accountability and responsibility for actions taken.