When referring to legal matters, foreseeability is a term used to describe the degree to which a party might anticipate an occurrence or a result. In general, foreseeability means to have the ability to see into the future and understand potential outcomes. For business owners, foreseeability can be essential for many decisions and actions taken. Essentially, it helps mitigate legal, financial, and other foreseeable risks.
Though foreseeability is a difficult concept to fully grasp, it’s important to understand in order to protect your business and personal interests. Understanding what is legally foreseeable is essential in contract development, insurance policies, intellectual property, and other business dealings.
What Constitutes Foreseeability?
Foreseeability occurs when a party has enough knowledge to understand the possible consequences of their actions. As an example, imagine a bar owner who is building a deck for their customers. They would be expected to foresee the potential danger to their customers walking on the deck when it is wet, despite not actually seeing rain or slippery conditions ahead of time. A court would be likely to look at any “reasonably foreseeable risk” the bar owner needed to take precautions for, and failure to accommodate these risks could result in liability.
What’s at Stake for Business Owners?
In today’s litigious society, it is important to understand what is foreceable and build your business in accordance with this understanding. It’s essential to remain aware of the potential consequences of all decisions and actions. Though this does not require predicting the future, it does require understanding what “reasonable foreseeability” means in the context of your business. This understanding can help to proactively protect your business and potentially avoid unnecessary liabilities.