Obligations

Persons may incur obligations voluntarily by entering into a contract - for instance to get a job, buy a house, borrow on the security of a mortgage, take out an insurance policy. They also - whether they like it or not - incur the obligation imposed by law (the law of tort) to compensate others for unjustified harm caused them deliberately or carelessly. Likewise imposed by law are the duties which stem from family relationships.

Liability

The structure of private law is sealed by the following rule, now almost universal: a person must answer with his or her property for performance of all obligations. So, if the worst comes to the worst, most of a debtor's assets can be taken by process of execution. Human beings can be made bankrupt, and corporations liquidated.

Sources:

Legal Information Institute of Cornell University Low School

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