Premises Liability for Business Owners

Adam Keilen Real Estate Law

Generally, as a small business owner, what duty do I owe to my customers, as it relates to premises liability?

The duty owed to a business invitee (generally, someone who is there for a commercial purpose) places certain requirements on possessors of land. For purposes of our discussion, the business owner must: i. maintain the premises in a reasonably safe condition; ii. warn invitees of dangers they know of, or should know of, or have created, unless the dangers are open and obvious; and iii. inspect the premises to discover possible dangerous conditions if a reasonable person would have inspected under the circumstances. The Michigan Court of Appeals described the rule for liability to an invitee in Prebenda v. Tartaglia, 245 Mich App 168, 627 NW2d 610 (2001):

A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, and only if, all of the following are true: the possessor (a) knows, or by the exercise of reasonable care would discover, the condition, and should realize that it involves an unreasonable risk of harm to such invitees; (b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it; and (c) fails to exercise reasonable care to protect them against the danger. Id.

What does that really mean? For example, Andy owns a chain of restaurants. Barbara, a customer, walks in to one of Andy’s restaurants. Andy welcomes her and starts her toward a table. Barbara is severely shocked when she brushes against an electrical cord hanging from the ceiling. For Andy to be liable, we will consider (3) questions:

  1. Did Andy know about the cord, or should he have known about the cord – in addition, was the cord unreasonably dangerous?
  2. Should Andy have expected that customers like Barbara would fail to recognize the hanging cord, and fail to recognize that the cord was dangerous?
  3. Did Andy fail to take reasonable steps to protect Barbara from the cord?

If we answer “yes” to all three, that is bad news for Andy; however, for Andy to have breached his duty, Barbara would need to get a “yes” on all three questions/elements. In other words, Andy’s duty to Barbara is limited by the questions surrounding unreasonable harm and Andy’s knowledge of the same, followed by the steps Andy took thereafter.

Putting it all together. Generally, business owners do not guarantee their customer’s safety; rather, their duty is limited to the exercise of reasonable care for customers’ protection. Bryant v Brannen, 180 Mich App 87, 446 NW2d 847 (1989).