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Correct Answer

Libel (lɪ-bəl)
C.  A written defamatory statement.
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Note:  If you chose answer A, you were thinking of a similar sounding word, liable, which means "legally responsible".

Legal Definition - A defamatory statement expressed in a fixed medium, esp. writing but also a picture, sign, or electronic broadcast.
Black's Law Dictionary® Eighth Edition © 2004 
Libel can be either a noun or a verb.  As a verb, it means "to defame (someone) in a permanent medium, esp. in writing." Black's Law Dictionary® Eighth Edition © 2004
You may also see the word "libelous" used as an adjective to describe a written statement that is defamatory.
Additional Information - Libel and slander are legal claims for false statements of fact about a person that are printed, broadcast, spoken or otherwise communicated to others. Libel generally refers to statements or visual depictions in written or other permanent form, while slander refers to verbal statements and gestures. The term defamation is often used to encompass both libel and slander. Media Law Resource Center © 2006

Recent Usage - The Daily Telegraph is considering an appeal to the House of Lords after it lost a court bid to overturn a £150,000 libel award to MP George Galloway. 
Mr. Galloway successfully sued the paper for suggesting he had received money from Saddam Hussein's regime in Iraq. The paper said it was "disappointed" by the Court of Appeal's verdict.
BBC News Wednesday, 25 January 2006, 21:55 GMT

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