Bombardier Inc., the Canadian aircraft manufacturer, included the following note (adapted) in its 2017 annual report:

1. Why are these contingent (versus real) liabilities?
2. How can a contingent liability become a real liability for Bombardier?

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Notes to the Consolidated Financial Statements 39 b) (in Part): Commitments and Contingencies In connection with the signing of firm orders for the sale of new aircraft, the Corporation enters into specified-price trade-in commitments with certain customers. These commitments give customers the right to trade-in their pre- owned aircraft as partial payment for the new aircraft purchased.