Reasonable Reliance Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Reasonable Reliance, written in plain English, along with examples of how it is used.

What is Reasonable Reliance?

(n) Reasonable reliance is the level of faith an average person would have placed on the words of another person in taking a decision especially while executing an agreement. So when the circumstances apparently proves contrary a reasonable man will not accept the dishonesty

History and Meaning of Reasonable Reliance

Reasonable reliance refers to the level of trust or faith an ordinary person places in another person's words or actions when making a decision or entering into an agreement. In the legal context, this term is commonly used in cases involving breach of contract or fraud. To prove reasonable reliance, the party must show that their actions were based on the other party's false representation, and that a reasonable person in a similar situation would have made the same decision.

Examples of Reasonable Reliance

  1. A company representative promises a client that a product will be delivered by a certain date. The client relies on this promise and cancels its order for the same product from another supplier, only to find out that the company fails to deliver on the promised date.

  2. A landlord tells a tenant that the apartment they are renting is up to code and safe to occupy. The tenant relies on this representation and signs the lease agreement, only to discover that the apartment has several safety violations that were not disclosed by the landlord.

  3. An employee resigns from their current job after receiving a job offer from a new employer. The new employer later retracts the offer without notice, leaving the employee without a job.

Legal Terms Similar to Reasonable Reliance

  1. Justifiable reliance: a similar term used to describe the level of trust or faith that a reasonable person would place in the words or actions of another party.

  2. Material misrepresentation: a false statement or representation that is material to a decision and induces reliance.

  3. Negligent misrepresentation: a false statement made by one party to another, which induces reliance and causes harm or loss.