Also known as: prudently · prudence · prudent person · prudent investor
Written by attorneys · grounded in primary & secondary sources — see below
Conduct that a person of reasonable prudence and intelligence would undertake after considering the purposes, terms, and circumstances of the matter at hand. The standard requires the exercise of reasonable care, skill, and caution.
Priya Prasad contracted to buy land from Preston Pratt. A recorded easement appeared in the chain of title that Pratt could not remove before closing. Priya refused to close, asserting that a reasonably prudent purchaser with full knowledge of the facts would reject the title as unmarketable.
An officer received a reliable tip and observed Pablo Perez enter a known drug house carrying a package matching the description of recent thefts. The officer arrested Perez. The facts and circumstances were sufficient to warrant a reasonably prudent person in believing that Perez had committed a crime.
Select any source to read its text and confirm it supports the definition.
Portia Price, trustee of a family trust, considered the trust's income needs and long-term growth goals before investing in a diversified portfolio. She documented her analysis of risk and return. The court measured her conduct against the standard of a prudent person administering a trust of comparable purpose and circumstances.
Precision Tools hired Phoebe Park to inspect equipment before sale. A person of reasonable prudence in her position would have discovered the missing safety guard during a routine inspection. Park's failure to ascertain the defect exposed the company to liability under the should-know standard.
The board of Pacific Bank condominium association reviewed bids and selected a contractor for roof repairs after comparing costs and warranties. The board exercised ordinary care and prudence in managing the common property and financial affairs subject to its control.
Priscilla Parks, trustee, evaluated whether to delegate investment management to an outside advisor. She concluded that a prudent trustee of comparable skills could properly delegate the function under the circumstances and selected the advisor after reasonable investigation.
A personal representative must observe the standards of care applicable to trustees and administer the estate as a prudent fiduciary would. This requires safeguarding assets, segregating funds, and avoiding conduct that exposes the estate to unnecessary risk.
No, provided the delay is reasonable and tied to preserving or enhancing estate assets for the beneficiaries. Temporary management such as renegotiating leases or completing safety upgrades can be consistent with prudent administration when it serves the best interests of the successors.
The prudent standard measures conduct against a reasonably prudent person in like circumstances and applies to fiduciary and tort duties. Contractual capacity requires understanding the nature and consequences of a specific transaction and is a more demanding test.
A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate. The trustee must exercise reasonable care, skill, and caution in selecting the agent and in establishing the scope and terms of the delegation.
…a freedom, but anyone in a long-lasting marriage will attest that that happy state constricts, rather than expands, what one can prudently say.) Rights, we are told, can “rise . . . from a better informed understanding of how constitutional imperatives define a liberty that remains urgent in our own era.” (Huh? How can a…