Legal risks primarily involve what kind of breaching?

Legal risks specifically involve the potential for loss due to legal actions or litigation arising from breaches of obligations. A breach of contract with counterparties directly aligns with this definition, as it encompasses situations where one party fails to fulfill their contractual duties. Such breaches can lead to lawsuits, disputes, and potentially significant financial losses, making them a central concern in risk management.

In this context, other risks mentioned—like market contracts with competitors, financial regulations, and operational procedures—are relevant to overall risk management but do not specifically pertain to legal risks in the same way that breach of contract does. These other options might involve regulatory or compliance issues, competitive practices, or internal processes, but the core of legal risk is essentially rooted in the relationships and agreements between contractual parties. Thus, focusing on breach of contract is key to understanding legal risks within risk management frameworks.