What does negligence refer to in legal terms?

Negligence in legal terms specifically refers to the failure to take ordinary or reasonable care in a situation, resulting in harm or damage to another person. This concept is crucial in personal finance and investments as it can influence liability and responsibility in various financial transactions and interactions. When someone does not act with the level of caution that a reasonable person would exercise under similar circumstances, and this lack of care leads to an injury or loss, negligence may be established. The focus is on the action (or inaction) and the standard of care expected in everyday situations. This is essential in understanding how legal principles can apply to financial decisions and actions.