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Duty of Care in the USA
The duty of care is a fiduciary duty owed by corporate directors and officers to make choices that prioritize the corporation's interests with reasonable diligence and wisdom. This obligation is owed to the company, not to its shareholders or to society. According to the American Law Institute's Principles of Corporate Governance, it means carrying out duties with the utmost diligence and good faith while keeping the corporation's interests in mind.
What is the meaning of Duty of Care?
Duty of Care is basically a legal obligation imposed by state laws on a person whether an individual or a corporation to take reasonable care in order to prevent an injury to others due to their actions and conducts.
Provisions Under the Laws of USA
The 10th Amendment empowers the states to enact their own laws on the subjects of torts, consequently the rules regarding the legal obligation of exercising a duty of care differs from state to state however, there are some essential principles which constitute the core principles of the provisions in different statutes.
The laws impose a statutory duty on every person to refrain themselves from causing an intentional injury or harm to another. It means that when a person willingly harms another without any legal justification then it amounts to an intention injury, hence, giving rise to a legal action of damages.
The law commands individuals to abstain from acting negligently because even if one does not have an intention to cause harm to another, their actions might cause a possibility of risk or injury to someone due to disregard of care that needs to be considered.
The laws remark strict liability on persons who fail to take reasonable amounts of care while conducting their actions which have the potential to affect others irrespective of the fact that what degree of care was necessary to be taken.
The Duty of Care exists when it can be anticipated that the actions of one person can cause harm to another if a reasonable degree of care and caution is not undertaken by the person who could have prevented the harm.
Tests to Determine Duty of Care
These are some of the common factors which are used by courts as a multi-factor test in order to determine the existence of the Duty of Care in different situations. Additionally, these factors also found mention in almost all the state legislations on torts in the United States of America.
Foreseeable of harm.
Degree of certainty of harm caused and potential of possible injury.
Feasibility of alternative conduct.
Degree of proximity between the conduct of defendant and injury caused to plaintiff.
Policy to prevent future harm of the same kind.
Utility and importance of defendant’s conduct.
Extent of defendant’s liability and repercussions to society on breach of duty.
Remedies
The plaintiff can claim damages against the defendant if the former is able to establish that the latter owed a duty of care towards him and he breached the duty due to his negligent conduct as he failed to take reasonable care which has resulted in harm to the plaintiff. Although, all these factors need to be established specifically to claim the legal remedy.
Conclusion
As part of their fiduciary responsibility, directors and officers have a duty of care to act in the best interests of the corporation by making decisions in good faith and with reasonable care. The business judgment rule is employed by courts to assess this obligation, but typically, a lower standard of negligence is applied. Corporations can reduce their exposure to the duty of care by obtaining indemnity, D&O insurance, and liability waivers.
Frequently Asked Questions
What is the duty of due care?
The standard of care that a reasonable person would use in the same situation or under comparable circumstances is known as due care, also known as ordinary care and reasonable care. In a tort case, this standard of care is applied to assess whether a defendant was negligent.
What is an example of a duty of care?
The areas where you depend on that other party are subject to the duty of care. For example, a doctor has a responsibility to treat you properly, and a factory owner has a responsibility to maintain a safe workplace.
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