What Does “Gross Negligence” Mean in a Contract?
Extreme carelessness or reckless disregard for others' safety or rights - more severe than ordinary negligence.
Detailed Explanation
Gross negligence goes beyond simple mistakes or carelessness. It involves reckless disregard or willful indifference to an obvious risk. Think of the difference between accidentally running a red light (negligence) and drag racing through an intersection (gross negligence).
Many contracts that limit liability carve out exceptions for gross negligence. Even if consequential damages are excluded, you often can still recover for losses caused by the other party's gross negligence.
Example in a Contract
“The limitations of liability set forth in this Agreement shall not apply to damages arising from a party's gross negligence, willful misconduct, or fraud.”
Why It Matters
Gross negligence exceptions preserve your ability to recover for truly egregious conduct. When reviewing liability limitations, check whether gross negligence is carved out - if not, even reckless behavior might be covered by the limitation.
Related Terms
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