Also known as: breaches of the duty of care · breach of duty of care · breach of duty
Written by attorneys · grounded in primary & secondary sources — see below
Conduct that falls below the standard of care a reasonably prudent person would exercise under the circumstances when performing duties owed to another. The breach occurs when an actor with an established duty fails to take action required by that duty or takes action creating an unreasonable risk of harm. Liability follows when the breach causes cognizable injury to the protected interest.
Bei Bai, an officer at Benson Motors, learns that a plant manager has falsified safety certifications on vehicles scheduled for sale. Bai believes the falsification is a material violation of law but does not notify the chief compliance officer or the board. The company later faces regulatory penalties and recalls. The failure to inform constitutes a breach of the duty of care.
Barbara Bennett is appointed personal representative of an estate. Within thirty days she mails notice of her appointment only to the decedent's children and omits two devisees named in a will mentioned in the appointment application. One omitted devisee later learns of the administration after assets have been distributed. Bennett's omission breaches the duty of care owed to the devisees.
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The NCS board approves deal-protection measures that lock up a merger without obtaining updated fairness advice or exploring alternative bids. Omnicare later offers a higher price that the locked-up structure prevents shareholders from accepting. The board's approval process demonstrates a breach of the duty of care.
An attorney at a firm representing a target company learns nonpublic details about an upcoming tender offer. The attorney purchases target shares for personal profit before the offer is announced. The trading constitutes a breach of fiduciary duty owed to the client.
A medical-center employee reports research misconduct by a supervisor. The center terminates the employee shortly afterward, citing performance issues that were not documented before the report. The termination decision reflects mishandling of a protected complaint.
A high school suspends two students for alleged misconduct without providing any opportunity to be heard. The students later prove the suspensions were based on mistaken identity. The school's failure to afford process constitutes a denial of procedural due process.
The duty of care requires partners to refrain from grossly negligent or reckless conduct, willful or intentional misconduct, or knowing violations of law. A decision that creates obvious and substantial risks to partnership property under known adverse conditions can meet this threshold even if the partner possesses professional experience.
An isolated internal calendaring error amid otherwise diligent representation may not rise to negligence if the overall handling of the matter remains within the bounds of reasonable professional conduct. Courts evaluate the totality of the representation rather than any single administrative lapse.
A landlord leasing premises for public admission breaches the duty of care by failing to use reasonable care to discover or remedy a known unreasonable risk of harm when the tenant is expected to admit the public before the condition is made safe.
…on nonpublic information through the purchase or sale of securities. The classical theory targets a corporate insider's breach of duty to shareholders with whom the insider transacts; the misappropriation theory outlaws trading on the basis of nonpublic information by a corporate "outsider" in breach of a duty owed not to…