Torts/ Duty of Care
Tort liability exists at common law (or, in civil law countries, under an article in the general “civil code” on personal responsibility). Under common law, torts are graduated according to the degree of willfulness or intent that constituted the misconduct of the “tortfeasor” (wrongdoer).
Negligence
Ordinary negligence exists when a party (i) owes a non-contractual duty of “reasonable care” to another party, such as a duty to comply with professional standards in an industry, (ii) disregards the duty, (iii) causes damage or injury to the rights or person of the other party and (iv) such damages were proximately caused by the breach of the duty. In outsourcing, this issue arises from the contractual provision that the service provider will perform in accordance with “industry standards” or other “professional standards.” This addition of a negligence standard to the services contract imposes a risk of additional liability for the service provider but may be appropriate where the service provider is actually marketing or performing in an “industry standard” or “professional-level” quality of service.
Gross Negligence
Gross negligence arises from negligence where the failure to comply with the common-law duty resulted from an attitude of willfulness. To be grossly negligent, the tortfeasor must have an attitude of not caring about the consequences of his or her actions. In contrast, ordinary negligence occurs where the tortfeasor cares about not making “mistakes” but does make the “mistake.”
Gross negligence can constitute a breach. The consequences of gross negligence may be severe: no limitation on the liability of the grossly negligent party. Disclaimers and limitations of such liability may be unenforceable as a matter of public policy.