What type of liability arises from the assumption of legal liability through a contract?

Contractual liability refers to the type of liability that originates from an individual's or entity's obligations established through a contract. When a party enters into a contract, they assume specific responsibilities and obligations to uphold the terms outlined in that agreement. If they fail to fulfill these obligations, they can be held legally accountable for damages resulting from that breach. This form of liability is distinct because it is specifically tied to the consent and agreement of the parties involved, thus creating a legal expectation for performance.

In contrast, general liability encompasses broader exposure to claims related to negligence or accidental harm not specifically tied to contractual obligations. General negligence relates to failure to exercise reasonable care, while punitive liability involves additional damages intended to punish wrongful conduct, both of which do not center around contractual expectations. Contractual liability is therefore rightly identified as arising specifically from the agreement between the parties involved.