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We will adopt a "reasonable person" standard for reaching conclusions.
We use a reasonable person standard at The Fact Checker.
The reasonable investor standard differs from the reasonable person standard in another important way.
The distinctions identified indicate that use of the reasonable investor standard is, in all likelihood, more costly than the prototypical use of the reasonable person standard in tort.
This raises the question: does the reasonable investor standard differ from tort law's reasonable person standard in ways that suggest it is less efficient?
But the perseverance of tort law's reasonable person standard over the course of centuries of common law development suggests that its benefits likely outweigh its costs.
The uncertainty generated by the reasonable investor standard therefore creates a stronger pressure to settle cases that are not dismissed pretrial than does the uncertainty generated by the reasonable person standard in traditional tort cases.
In a simple tort case the indeterminacy of the reasonable person standard is mitigated by the use of the jury, which can channel its collective wisdom as to what constitutes reasonable behavior in deciding the outcome of the case.
He directed the jury first to apply a reasonable person standard to determine whether defendant's warning was adequate, and then to determine if an adequate warning would have deterred Graves specifically.
To the contrary, the reasonable investor has a well-known legal antecedent: tort law's storied "reasonable person". The reasonable investor standard shares the same basic justification as tort law's reasonable person standard and has been subject to the same set of critiques.
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