Understanding the relevant legal context is critical to the safe and successful practice of orthopaedic surgery. Specifically, three areas of liability are relevant to most physicians: medical malpractice, products liability, and the liability of health care organizations. Medical malpractice encompasses the professional physician-patient relationship with its implied contract, consent, fiduciary responsibilities, and duty to provide the standard of care, as well as certain common-law duties pertinent in special circumstances. Orthopaedic surgeons who design implants or who have a relationship with a device manufacturer are at risk for liability for a failed product. In general, the hospital entity is responsible for the actions of its physician-employees. Still unclear is the degree to which a physician is obligated to appeal to a third-party payer on behalf of a patient. Physicians should remember that, above all else, common sense with regard to the treatment, informed consent, and advocacy of patients is essential to avoiding many medical-legal pitfalls.