Also known as:reasons to know · constructive knowledge
Written by attorneys · grounded in primary & secondary sources — see below
Information from which a person of reasonable intelligence or of the actor's superior intelligence would infer that a particular fact exists or would govern conduct on the assumption that the fact exists.
Sources & Authorities· 12 primary sources
Select any source to read its text and confirm it supports the definition.
Statutes
Uniform Acts
Restatements
Casebooks
Hornbooks
Study Supplements
Dictionaries
How it applies
Common Examples
6
Intoxicated Party Signs Margin Agreement
Rajesh Rao consumed multiple cocktails at a reception and displayed slurred speech while negotiating a margin trading agreement with a representative of Regal Apparel. The representative had received prior emails about Rajesh's recent hospitalization and observed his erratic behavior yet proceeded without further inquiry. Rajesh later sought to avoid the agreement on incapacity grounds. The representative's prior knowledge supplied reason to know of Rajesh's inability to act reasonably in relation to the transaction.
Landlord Conceals Structural Defect
Rachel Ramirez leased a warehouse to Ruby Rivera for use as a fitness facility. Before the lease an inspector warned Rachel that corroded ceiling brackets were likely to fail. Rachel did not disclose the warning and instead described the system as older but serviceable. When the unit fell and injured a guest, Ruby and the guest had no reason to know of the hidden risk. Rachel's knowledge of the latent condition and failure to disclose established liability.
Revoked Consent to Enter Land
Raphael Rivera granted Rowan Russell permission to cross his property to reach a neighboring lot. After a dispute Raphael sent an email revoking consent. Rowan received the email but continued crossing the land. Because Rowan had reason to know of the revocation, the privilege to enter terminated and trespass liability attached.
Merchant Confirmation Satisfies Statute
Riverstone Manufacturing sent Redline Automotive a signed confirmation of an oral agreement for $600 of parts. Redline received the confirmation at its office but did not object within ten days. Redline as a merchant had reason to know the contents of the confirmation. The record therefore satisfied the statute of frauds against Redline.
Divergent Meanings Prevent Assent
Renata Russo and Radiant Technologies negotiated a services contract using the term intensive training. Internal emails showed each party attached materially different meanings to the term yet signed anyway. Neither party knew or had reason to know of the other's attached meaning. The absence of mutual assent prevented contract formation on that essential term.
Landlord Liability for Tenant Activities
A landlord leased property to a tenant knowing the tenant would operate heavy machinery that created an unreasonable risk of harm to neighboring properties. The landlord had reason to know that special precautions would not be taken. After transfer of possession the machinery caused physical harm outside the leased premises. The landlord's knowledge at the time of the lease established liability for the resulting injuries.
Common questions
Frequently Asked
5
How does reason to know differ from actual knowledge?+
Reason to know exists when a person has information that would lead a reasonable person or the actor with superior intelligence to infer the fact or to act on the assumption that the fact exists. Actual knowledge requires subjective awareness of the fact itself. The distinction appears throughout the Restatement provisions and the UCC.
Supporting sources
Does reason to know require the actor to investigate further?+
No. Reason to know is satisfied by information already possessed that would prompt a reasonable inference. It does not impose an independent duty to investigate beyond what the information itself indicates.
In capacity cases, what facts give a party reason to know of another's intoxication or mental condition?+
Visible signs such as slurred speech, flat affect, and prior communications about hospitalization or erratic behavior supply reason to know when they would lead a reasonable observer to infer impairment affecting the ability to act reasonably in the transaction.
Supporting sources
How does reason to know function under UCC § 2-201(2) between merchants?+
Receipt of a signed confirmation gives the receiving merchant reason to know its contents when the record is sufficient against the sender. Failure to object within ten days then binds the recipient to the statute of frauds.
Supporting sources
In landlord-tenant cases, when does a tenant have reason to know of a dangerous condition?+
A tenant has reason to know when the condition is open and obvious or when the landlord's disclosures would lead a reasonable tenant to infer the risk. Concealment or misleading statements by the landlord prevent the tenant from having reason to know.
Supporting sources
s or has
reason to know
that the information was obtained through an illegal interception. § 2511(1)(c). The statute provides a civil cause of action against any person who violates the statute. § 2520. The…
s, or has
reason to know
... of facts which create a high degree of risk of... harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk. In the…
reason to know
and the non-existence of which is a basic assumption on which the contract is made, no duty to render that performance arises, unless the language or circumstances indicate the contrary.…
of danger to users, the . . . manufacturer has a duty to give warning of such dangers.” Frey v. Montgomery Ward & Co. , 258 N.W. 2d 782, 788 (Minn. 1977). Similarly, under Louisiana law…
ContractsFormation of contracts · Mutual assent (including offer and acceptance, and unilateral, bilateral, and implied-in-fact contracts)UBEIntermediate