In presenting basic legal principles regarding liability, the author considers settings for legal action against professionals, defines malpractice and negligence from the legal perspective, and reviews trends in court decisions in nonclient lawsuits against mental health professionals. Separate sections of the chapter discuss liability in cases where a professional uses hypnosis with a client and liability in failing to comply with child abuse reporting laws. Other issues discussed regarding occasions for liability are negligent hiring or supervision, negligent failure to refer a client, abandoning a client, using the Internet to conduct a professional service, informed consent, and dual relationships in conducting therapy versus forensic evaluation. Other sections of the chapter discuss immunity from liability and the importance of having malpractice insurance. Suggestions for avoiding liability for malpractice and negligence are to be open and honest with patients regarding the parameters of the provider-patient relationship; to make clear to the client professional qualifications, area of practice, and expectations; to practice within areas of competence; to maintain competence in one's area of practice; to maintain complete records; to treat patients with respect; to terminate treatment properly and in writing; to know the laws that affect one's practice to maintain an ongoing consultative relationship with other respected colleagues; and to seek competent advice when in doubt. 91 references