Toxic link
A toxic link originates from a site built to manipulate rankings: a link farm, bulk directory, or artificial site network. In sufficient volume, such links expose the target site to algorithmic filters that can suppress its visibility.
In practice
Since the latest algorithm generations, Google neutralises most of these links without issuing a penalty — disavowal is only useful following a manual action notification or a massively artificial link profile. The real risk lies at purchase: a secondhand domain with a troubled past carries its history into your account.