Legal Definitions - reason to know

The legal term reason to know describes a situation where a person, based on the information and circumstances available, should have recognized or inferred a particular fact, even if they didn't have direct, explicit knowledge of it. It implies that a reasonable person, using ordinary care and intelligence, would have either understood the fact's existence or realized there was a high probability of its existence, prompting them to investigate further.

Here are some examples to illustrate this concept:

• Example 1: Property Purchase

  Imagine a prospective buyer inspecting a commercial building. They notice several large, dark water stains on the ceiling in multiple rooms, a musty odor throughout the property, and a dehumidifier running in the basement. The seller, when asked, simply states, "Oh, that's just an old building."

  In this scenario, the buyer has reason to know that there is likely an ongoing or recurring water intrusion problem, even if the seller never explicitly admitted to a leak. The visible stains, odor, and dehumidifier are all pieces of information that would lead a reasonable person to infer the existence of a significant water issue and prompt further investigation, such as a professional inspection.

• Example 2: Workplace Safety

  A factory supervisor regularly observes an employee operating a piece of machinery without wearing the required safety goggles. Other employees have also mentioned to the supervisor that this particular worker frequently disregards safety protocols. No formal accident has occurred yet, and the supervisor has not directly told the employee to wear the goggles every time.

  The supervisor, and by extension the employer, has reason to know that the employee is creating a safety hazard. The supervisor's direct observations and the reports from other employees provide sufficient information for a reasonable person in that position to infer that the employee is not following safety rules, even without a formal complaint or incident. This knowledge would obligate them to intervene.

• Example 3: Contractual Obligation

  A small business owner hires a freelance web designer to create a new e-commerce website. During their initial discussions, the designer repeatedly emphasizes the importance of providing high-quality product images and detailed descriptions for each item, stating that "poor content will severely impact sales." The business owner then provides blurry, low-resolution photos and minimal product information.

  The business owner has reason to know that the website's potential success will be hampered by the inadequate content they provided. The designer's repeated warnings, even if not phrased as a direct contractual breach, would lead a reasonable business owner to infer that their contribution was insufficient for the desired outcome. They cannot later claim ignorance about why the website performed poorly due to content quality.