reasonable reliance

Reasonable reliance is a legal concept that refers to what a prudent person would believe and act based on information provided by another party. This concept is prevalent in several areas of law, notably in cases involving the tort of fraud. 

Cases such as Windsong Lane Farms v Telmark, LLC, explain that fraud plaintiffs must prove not only that they relied on the defendant’s misrepresentation in question, but that the representation was reasonable. In other words, a person who claims to have been harmed by another’s false statement must prove that they were justified under the particular circumstances in believing that the statement was actually true. Reasonable reliance “connotes something more than simply a bare hope or anticipation." See: Home Mutual Insurance Company v. Broadway Bank, 53 NY 2d 568 - NY Court of Appeals 1981. Where a statement is made under conditions or circumstances where reliance on that statement cannot be reasonably anticipated or foreseen, the plaintiff cannot demonstrate reasonable reliance. During a civil trial, the jury will decide based on the evidence whether or not a plaintiff’s reliance on a defendant’s statement was reasonable under the circumstances of the case.

[Last reviewed in May of 2024 by the Wex Definitions Team]

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