Gross negligence
Carelessness far worse than ordinary negligence, showing reckless disregard for others’ safety or rights, and often carved out of liability caps.
What it means
Ordinary negligence means failing to take the care a reasonable person would take. Gross negligence is a more extreme failure: conduct so careless that it shows a reckless or conscious disregard for the consequences. It sits between ordinary negligence and intentional wrongdoing, which contracts usually call willful misconduct.
In contracts, the phrase mostly appears in liability clauses. Caps, damages exclusions, and indemnities often say they do not apply to “gross negligence or willful misconduct.” If an IT contractor ignored repeated warnings and left a client’s customer database publicly exposed, the client might argue gross negligence to get around the liability cap.
The definition and its effect vary by state. Some courts refuse to enforce a release or cap covering gross negligence as a matter of public policy, while others allow it between sophisticated businesses. Because the term is vague, parties sometimes define it in the contract, and fights over whether conduct was “gross” can be expensive to litigate.
What to watch for
- Check whether the liability cap carves out gross negligence, and whether that carve-out applies to both parties.
- See whether the contract defines gross negligence, and if so, whether the definition is so narrow that it would rarely apply.
- Look for matching carve-outs for willful misconduct and fraud.
- Confirm that an indemnity does not require you to cover the other party’s own gross negligence, which many courts will not enforce anyway.
Example clause
The limitations in Section 10 do not apply to damages resulting from a party’s gross negligence, willful misconduct, or fraud. “Gross negligence” means conduct showing a reckless disregard for the foreseeable consequences to the other party.
The liability cap stops protecting a party whose conduct was reckless or intentional.