Reasonableness Standard
 |
Definition of 'Reasonableness Standard'1) A requirement of the Consumer Leasing Act that takes into consideration the individuals' circumstances according to the amount of harm experienced by the lessor if they early terminate, make late payments or cease to make payments. The reasonableness standard looks at delinquency, default or early termination based on the anticipated or actual harm caused by such delinquency, default or early termination; the difficulties in proving the loss; and finally the inconvenience in finding a solution.2) A benchmark used in court when reviewing the decisions made by a particular party. The reasonableness standard is a test which asks whether the decisions made were legitimate and designed to remedy a certain issue under the circumstances at the time. Courts using this standard look at both the ultimate decision, and the process by which a party went about making that decision. |
 |
Investopedia explains 'Reasonableness Standard'1) A good rule to use in evaluating the early termination of any vehicle lease is to compare the blue book value of the car at the time to the total payments made under the lease up to the surrender date. Under the Consumer Leasing Act, you have the right to get an independent appraisal by someone agreed to by you and the leasing company.2) Along with the business judgment rule, the reasonableness standard makes up the backbone of many business-related court cases. Courts must determine whether or not a particular decision is arbitrarily made, or if it is designed to address a defined issue or risk. One of the major factors influencing a court's decision is whether a party's actions affect "health, happiness and enjoyment of life", and that a party's actions do not disproportionately affect others. |
Related Definitions
Articles Of Interest
-
Proxy Voting Gives Fund Shareholders A Say
You have the right to take part in important company decisions - even if you cannot attend the meetings. -
What Are Corporate Actions?
Be a savvy investor - learn how corporate actions affect you as a shareholder. -
Understanding Stock Splits
We explain what they are, the thinking behind them as well as their results. -
How To Get The Best Price On A New Car
Find out tips that'll save the haggling and get you the best price on a new car. -
The True Cost Of Owning A Car
Driving is often the most convenient way to get around, but it'll cost you. -
The U.S. National Spending And Debt
We are looking at what could be the official year of the Federal Budget, or, more specifically, our debt and how we will manage it for many years to come. -
Austerity: When The Government Tightens Its Belt
When a government tightens its belt in tough economic times the entire nation feels the squeeze. -
Why It's Important To Regulate Foreign Exchange
In an increasingly globalized economy, the significance of the foreign exchange marketplace cannot be underestimated. -
Zynga's New Venture Is A Major Gamble
The current state of online gambling in the U.S. makes Zynga’s move into the market a very risky one. -
Sequestration: What Will It Do And What Should You Do?
Learn about the sequester, and possible ways to play it.
Free Annual Reports