The likelihood that a trading partner will opportunistically break a contract or expropriate property rights is called:
A)legitimate risk.
B)permissible risk.
C)constitutional risk.
D)legal risk.

Question

Quizplus · Accepted Answer

Legal risk refers to the possibility of a breach of contract or expropriation of property rights by a trading partner. It reflects the potential losses that may arise from a counterparty's failure to comply with contractual obligations or government intervention. Legal risk can be addressed by enforcing contractual obligations, using appropriate legal frameworks, or mitigating risks through insurance or other risk management strategies. Hence, legal risk is the most suitable option among the given choices.

The Likelihood That a Trading Partner Will Opportunistically Break a Contract