Also known as:knows or has reason to know · known or had reason to know · knowing or having reason to know · reason to know
Written by attorneys · grounded in primary & secondary sources — see below
A standard of awareness under which a party possesses information from which a person of reasonable intelligence would infer that a particular fact exists or would govern conduct on the assumption that the fact exists.
Sources & Authorities
How it applies
Common Examples
6
Intoxicated Party Signs Margin Agreement
Charlotte consumed multiple cocktails at a reception and exhibited slurred speech while negotiating a margin trading agreement with View Finance's representative. The representative had received prior emails about Charlotte's hospitalization and observed her erratic behavior. Charlotte later sought to avoid the agreement on grounds of incapacity. The court held that View Finance had reason to know of Charlotte's condition and could not enforce the contract.
Landlord Fails to Disclose Hidden Hazard
Keystone Capital leased a warehouse to Kinetic Solutions without disclosing a concealed structural defect in the floor. Kinetic Solutions employees later suffered injuries when the floor collapsed. The tenant had no information suggesting any risk and could not have discovered the defect through ordinary inspection. Keystone Capital is subject to liability because it knew or had reason to know of the condition and the tenant lacked such knowledge.
Select any source to read its text and confirm it supports the definition.
Statutes
Uniform Acts
Restatements
Casebooks
Study Supplements
Revoked Consent to Enter Service Bays
Metro Motors emailed Sparkle Shine Detailing's supervisor revoking permission to enter locked service bays after items went missing. A Sparkle Shine worker later used the keypad code to enter at night. The worker had received no information contradicting the revocation notice sent to the supervisor. The entry constituted trespass because the worker knew or had reason to know that consent had been withdrawn.
Merchant Confirmation Satisfies Statute of Frauds
Nova Outlet mailed a signed order confirmation for eight hundred dollars of renovation materials to store manager Harry. Harry received the confirmation at his home address but did not open it or object within ten days. Both parties qualified as merchants in the retail goods context. The confirmation satisfied the statute of frauds against Harry because he had reason to know its contents.
Divergent Understandings Prevent Mutual Assent
Mountain Learning and the City of Roswell executed a written agreement for intensive after-school programs. Internal emails showed each party knew the other attached materially different meanings to the term intensive regarding group sizes and session frequency. The parties nevertheless signed to meet grant deadlines. No contract formed on that term because each party knew or had reason to know of the other's different meaning.
Landlord Liability for Tenant Activities
A landlord transferred possession of property to a tenant who immediately began operating heavy machinery known to create excessive noise and vibration. The landlord had consented to the activity at the time of the lease and possessed information indicating that special precautions would not be taken. Vibrations caused physical harm to structures on neighboring property. The landlord is subject to liability because it knew or had reason to know the activity would involve an unreasonable risk.
Common questions
Frequently Asked
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How does reason to know differ from actual knowledge under the UCC?+
Reason to know is satisfied when a party receives a record containing information from which a reasonable person would infer the relevant fact. Actual knowledge requires direct awareness rather than constructive notice. The UCC expressly distinguishes the two concepts in provisions addressing discovery and notice.
When does a landlord have reason to know of a dangerous condition under property law?+
A landlord has reason to know when it possesses information from which a reasonable person would infer the existence of the condition and the risk it poses. Liability arises only if the tenant lacks reason to know of the condition and the landlord expects the tenant will not discover it. The standard focuses on information available to the landlord at the time of the lease.
Does reason to know of a revocation terminate the privilege to enter land?+
Yes. Consent to enter land ends when the possessor revokes it and the entrant knows or has reason to know of the revocation. Notice to a supervisor or clear posted signs can supply the required reason to know. Subsequent entry without another privilege constitutes trespass.
What role does reason to know play in mutual assent under contract law?+
No contract forms when each party knows or has reason to know that the other attaches a materially different meaning to a manifestation. The standard prevents enforcement when parties consciously proceed despite known ambiguity. Internal communications revealing divergent understandings satisfy the reason-to-know requirement.
464 U.S. 417, 435 & n.17 (1984)Property
…has never depended on actual knowledge of particular instances of infringement; it is sufficient that the defendant havereason to know that infringement is taking place. 443 F. 2d, at 1162; see Screen Gems-Columbia Music, Inc. v. Mark-Fi Records, Inc. , 256 F. Supp. 399 (SDNY 1966).[^maj-38] In the so-called "dance hall"…