Legal risk
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Legal risk is risks that counterparty are not legally able to enter into a contract. Another legal risk relates to regulatory risk, i.e., that a transaction could conflict with a regulator's policy or, more generally, that legislation might change during the life of a financial contract.
[edit] The Risk Principle
The Risk Principle is an area of law closely tied to legal causation in negligence. It provides limits on negligence for harm caused unforeseeably.
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