A more thorough explanation:

Contingent liability refers to a liability that may or may not occur depending on the occurrence of a future and uncertain event. It is a financial or pecuniary obligation that is not yet certain but may become certain in the future. For example, a company may face a contingent liability if it is involved in a lawsuit and the outcome is uncertain.

Contingent liabilities are usually disclosed in the footnotes of financial statements. This is because they are not yet certain and may or may not occur. However, if they do occur, they can have a significant impact on a company's financial position.

For instance, if a company is facing a lawsuit and the outcome is uncertain, it may have to pay damages if it loses the case. This would result in a contingent liability becoming a real liability, which would affect the company's financial position.