How electronic stability control (ESC) works
ESC is a vehicle control system comprised of sensors and a microcomputer that continuously monitors how well a vehicle responds to a driver's steering input and selectively applies the vehicle brakes and modulates engine power to keep the vehicle traveling along the path indicated by the steering wheel position. This technology helps prevent the sideways skidding and loss of control that can lead to rollovers. It can help drivers maintain control during emergency maneuvers when their vehicles otherwise might spin out.
A driver loses control when the vehicle goes in a direction different from the one the steering wheel position indicates. This typically occurs when a driver tries to turn very hard or turn on a slippery road. Then the vehicle may understeer or oversteer. When it oversteers it turns more than the driver intended because the rear end is spinning or sliding out. When a vehicle understeers it turns less than the driver intended and continues in a forward direction because the front wheels have insufficient traction. ESC can prevent under- and oversteer by selectively braking wheels to produce a counteracting force which helps correct the vehicle's direction of travel. In some cases engine throttle also is reduced.
More information at http://www.iihs.org/ratings/esc/esc.aspx