Also known as: calculated risk · calculate risks · calculating risks · assumption of risk
Written by attorneys — see sources below.
An acceptance of a known hazard by a plaintiff that bars recovery in tort actions to the same extent as in other tort actions.
Corinne Cho purchased a home next to an existing gravel pit operated by Canyon Construction. She knew the pit generated constant dust and noise yet bought anyway because the price was low. When she later sues for private nuisance, the court treats her purchase as assumption of the known risk and bars recovery under the same rules that apply to other tort actions.
Cobalt Energy bought machinery from a supplier after its own engineer flagged possible defects in the seller's representations. The company proceeded with the purchase anyway to meet a production deadline. When fraud is later discovered, the court holds that Cobalt's conscious decision to accept the known uncertainty prevents it from recovering as a fraud victim.
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View caseA plaintiff who knowingly purchases property subject to an existing nuisance assumes the risk to the same extent as in other tort actions. The purchase itself supplies the voluntary encounter with the known hazard.
No. Partnership law protects decisions that accept known business hazards so long as the partner does not act with gross negligence or recklessness. A partner may weigh time pressure and prior experience against full compliance with internal protocols without incurring liability.
Insurance does not indemnify losses that are highly expectable costs of an enterprise. A party that would have avoided the conduct but for the availability of insurance cannot shift those deliberate risks to the insurer.