A Liability Agreement is a legally-binding document that outlines the responsibilities of those involved in a certain project or transaction. It specifies each party’s obligations, including which party will be responsible for any costs, losses, or damages associated with the agreement. This type of contract also outlines what compensation, if any, will be due should one party fail to fulfil their obligations under the agreement. By signing a Liability Agreement, both parties are agreeing to legally accept any potential liabilities related to the agreed-upon activities and projects.