Legal Definitions - right of contribution

The right of contribution is a legal principle that allows one party, who has paid more than their fair share of a common liability or debt, to recover the excess amount from other parties who are also jointly responsible for that same liability. It ensures that all parties who share a common obligation ultimately bear their proportionate share, preventing one party from shouldering the entire burden when others are equally or partially responsible.

Here are some examples illustrating the right of contribution:

• Co-Signers on a Loan: Imagine two siblings, Sarah and Tom, co-sign a personal loan from a bank to help their parents. Both Sarah and Tom are equally responsible for repaying the entire loan amount. If their parents default on the loan, and Sarah, being financially more stable, pays off the entire outstanding balance to the bank, she would then have a right of contribution against Tom. Sarah could legally pursue Tom to recover his proportionate share of the loan amount that she paid on his behalf. This example demonstrates the right of contribution because Sarah, as one of two jointly liable parties, paid the full common debt and can seek reimbursement from the other jointly responsible party (Tom) for his share.

• Joint Negligence in an Accident: Consider a situation where two drivers, Mark and Lisa, are involved in a multi-car collision. A court determines that both Mark and Lisa were equally negligent in causing the accident, and they are found jointly liable for $200,000 in damages to a third party whose car was totaled. If Mark's insurance company pays the entire $200,000 settlement to the third party, Mark (or his insurance company on his behalf) would then have a right of contribution against Lisa. Mark could sue Lisa to recover $100,000, representing her proportionate share of the damages. This illustrates the right of contribution because Mark, having paid the full amount of a judgment for which both drivers were jointly responsible, can seek to recover the other party's fair share.