reasonable

Just, rational, appropriate, ordinary, or usual in the circumstances. It may refer to reasonable care , cause, compensation, doubt (in a criminal trial), and a host of other actions or activities. In the law of negligence , for example, the reasonable person standard is the standard of care that a reasonably prudent person would observe under a given set of circumstances. An individual who subscribes to such standards can avoid liability for negligence. “Reasonable” is also frequently used for tax purposes. For example, the Internal Revenue Code § 162 allows for the deduction of “a reasonable allowance for salaries or other compensation for personal services.” It can also serve as a signpost for ascertaining liability in other areas, such as in securities fraud , where, in Basic v. Levinson , the court used a “reasonable investor” standard to determine if disclosure of information was significant enough to warrant fraud liability.

[Last reviewed in November of 2020 by the Wex Definitions Team ]

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