Deck 5: Negligence and Unintentional Torts

Question 1

Where a negligence harms a business (for example, a factory set on fire), Common Law courts award damages to replace it, but have been reluctant to go further and award damages for economic losses (for example, lost profits from downtime). How do Quebec courts differ in their treatment of negligence?

A) Quebec courts willingly award punitive damages but are less willing to award costs.
B) Quebec courts are much less willing than Common Law courts to award punitive damages.
C) There is little distinction between damages, and full restitution is required.
D) B and C are true.
E) A and C are true.

Answer 1

D

Question 2

Mr. Ma operated a dry-cleaning plant. Even if there was no harm or any intention of harming anyone, he could still be sued for the mere fact that dry cleaning chemicals escaped from his property. No damages resulted. If the plaintiff were successful what kind of damages would the court most likely award?

A) General damages
B) Special damages
C) Compensatory damages
D) Nominal damages
E) Punitive damages

Answer 2

D

Question 3

Jacqui and Penny decided to go into partnership in a small baseball equipment manufacturing firm. Jacqui raised $250,000 start-up funds, in large part on the basis of documents which she forged. These documents purported to show that they owned their factory, when in fact, they merely leased it. Jacqui spent all of the money on herself, and she now has no assets and has been jailed for 10 years. The creditors have contacted Penny and told her they will hold her liable for the loss.

A) Since she was unaware of Jacqui's fraudulent actions, Penny cannot be successfully sued by the creditors.
B) Since Penny is Jacqui's partner, she is liable for this fraud.
C) Penny is both civilly and criminally liable for Jacqui's behaviour.
D) Since they should have verified independently everything that they were told by Jacqui, the creditors must bear their own losses.
E) Penny can successfully argue volenti non fit injuria in her own defence.

Answer 3

B

Question 4

Jean and Donald hired a lawn care company to come to their house and spray for dandelions, which had overtaken their lawn. When the spraying was completed the chemical had not only killed the dandelions but had destroyed the grass to an irreversible state. When the company investigated, it found that the acid content of the soil had caused the reaction. The company stated that the reaction is so rare it seldom does preliminary acid tests and tried to downplay the situation. Jean and Donald are contemplating legal action.

A) The company, having full knowledge of potential reactions, proceeded without exercising the proper standard of care making them liable for the damages.
B) The manufacturer is liable because the potential reaction was not compensated for in the chemical formula even though the product's label bears a suitable warning.
C) The company and the manufacturer both acted reasonably and therefore have no legal liability.
D) The company may seek compensation from the manufacturer for a defective product.
E) All of these.

Question 5

While at a baseball game one afternoon, Jack bought Matt a hot dog. When Matt bit into the hot dog he broke his tooth on a nail in it. i. Jack cannot sue the hot dog vendor for breach of contract.
Ii) Matt can sue the hot dog vendor for breach of contract.
Iii) Jack can sue the hot dog manufacturer under the tort of manufacturer's liability
Iv) Matt can sue the hot dog manufacturer under the tort of manufacturer's liability.
V) The hot dog manufacturer will be strictly liable for allowing an inherently dangerous hot dog to leave his property and injure Matt.
Vi) Jack can sue for his emotional distress caused by the sight of blood coming from Matt's mouth.

A) i and iv.
B) i, iv and vi.
C) i and ii.
D) ii and iii.
E) ii, iii, v and vi.

Question 6

A seventy-year-old woman, using the escalator at the airport, dropped a glove. When she attempted to pick it up, she lost her balance and fell. As a result of the accident, she suffered a fractured arm. In an action by her against the company that had the responsibility of maintaining the escalator, the defendant company would argue which of the following for its best defence?

A) It did not owe her a duty of care.
B) It was not operating the escalator below the standard of care.
C) There were no damages suffered.
D) There was no causation.
E) Volenti non fit injuria.

Question 7

The Central Hospital, Dr. Cuttham, a surgeon, and the operating room staff are sued by Mrs. Mullen because a scalpel was left in her abdomen after an operation for a burst appendix. It is unclear how the scalpel was missed. i. The hospital will be liable if the operating room staff employed by it is found to have been negligent.
Ii) Mrs. Mullen must prove on the balance of probabilities that the defendants had the sole care and control of the operating room.
Iii) Mrs. Mullen must prove on the balance of probabilities that, unless someone has been negligent, scalpels are not left in abdomens after operations.
Iv) Mrs. Mullen must prove on the balance of probabilities that a reasonable surgeon has a duty of care to ensure that no foreign objects are left inside a patient, that Dr. Cuttham failed to meet the duty of care, and that she was injured because of this.
V) Dr. Cuttham will be held liable if he cannot show that he took all reasonable care and the scalpel was left by someone else.

A) i and iv.
B) ii and iii.
C) i, ii and iii.
D) i, ii, iii and v.
E) i, iv and v.

Question 8

As a result of an explosion while plugging the Wonder "C" Model widget into an electrical socket, Tina was left in a coma for nine years. When she regained consciousness, she wished to bring legal action against the manufacturer, ACME Widget Co., for her injuries. She did not remember much about the events that surrounded the explosion. While doing some research for her case she discovered that there had been an electrical storm on the evening she was using the Wonder "C" when it exploded. Which of the following legal principles would the manufacturer of the widget not be entitled to use?

A) doctrine of laches
B) res ipsa loquitur
C) contributory negligence
D) act of God
E) volenti non fit injuria

Question 9

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. B would be liable for the injury suffered by A when A slipped on the sidewalk in front of his shop, because he should have foreseen the possibility of injury to customers when he failed to remove the ice.

Question 10

Which of the following is a defence to negligence?

A) Release
B) Statute of limitations
C) Act of God
D) Waiver
E) All of the above

Question 11

Four of the five following elements, when proved against a defendant, would constitute a successful action in negligence. Which one of the five would not?

A) There was a duty not to injure.
B) The defendant breached the standard of care.
C) There was damage that was foreseeable by a reasonable person.
D) The duty of the defendant was unclear in the legal sense.
E) The defendant was the proximate cause (causation) of the damage.

Question 12

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. B is liable for the injury to A as a result of the automobile accident, because she would not have been travelling in the taxi if she had not injured her ankle at B's store.

Question 13

Miss Haversham, a guest at a wedding catered by Giardia's Fine Foods, became violently ill, as did several other guests. It was later found that only those who ate the crab salad appetizer became ill. Since Miss Haversham is not able to prove how she was injured by Giardia's but only that she was injured, presumably by them, which of the following concepts could she use to help her establish Giardia's negligence?

A) Agony of the moment
B) Volenti non fit injuria
C) Res ipsa loquitur
D) The doctrine of last clear chance
E) Vicarious liability

Question 14

Which of the following is a NOT a defence to negligence?

A) Libel
B) Statute of Limitations
C) Act of God
D) Waiver
E) Volenti non fit injuria

Question 15

Miss Haversham, a guest at a wedding catered by Giardia's Fine Foods, became violently ill, as did several other guests. It was later found that only those who ate the crab salad appetizer became ill. If Miss Haversham were to sue for negligence, she would normally have to prove

A) that Giardia's was strictly liable for her injuries.
B) that Giardia's failure to live up to the duty of care which it owed to her led directly to her injuries.
C) that Giardia's had a duty of care, which it failed by its actions, to serve her food that was fit to eat.
D) that Giardia's had a duty of care, which it failed by its actions, to serve her food that was fit to eat, and that Giardia's failure to live up to the duty of care, which it owed to her, led directly to her injuries.
E) that Giardia's had a duty of care, which it failed by its actions, to serve her food that was fit to eat, and that Giardia's failure to live up to the duty of care, which it owed to her, led directly to her injuries. The plaintiff must also prove causation.

Question 16

Richard drank all the beer at the house one evening, and knowing he was not in a fit state to drive, decided to walk down the highway to the beer store for more. In order not to get lost, he followed the centre line on the road. Milton, who was driving too fast for his headlights on low beam, hit Richard from behind, and seriously injured him.

A) Richard had clearly voluntarily assumed the risk of injury by walking on the highway, and Milton is not liable.
B) Richard had waived any right to sue by voluntarily getting drunk.
C) If Milton had the last clear chance to avoid the accident, he will be liable unless he can prove that Richard was the only one with the last opportunity to avoid the accident.
D) By getting drunk and walking on the highway, Richard was negligent and will have to bear all of the losses caused by his own negligence.
E) By getting drunk and walking on the highway, Richard was negligent and will have to bear part of the losses caused by his own negligence.

Question 17

Mr. Ma operated a dry-cleaning plant. Even if there was no intention of harming anyone, he could still be sued by someone harmed by dry cleaning chemicals that escaped from his property. This is an example of what tort?

A) Negligence
B) Occupier's Liability
C) Manufacturer's Liability
D) Nuisance
E) Professional Liability

Question 18

Terri was injured by an exploding pop bottle. She lost time from work, for which she was not paid, and had to undergo several painful operations. Her right eye was badly damaged, and she will lose the sight in it over the next few years. If she wins her case against the manufacturer of the pop bottle, she will be entitled to: i. an injunction.
Ii) an order of replevin.
Iii) nominal damages
Iv) punitive damages.
V) special damages
Vi) general damages.

A) all of these.
B) i, iii, v and vi.
C) ii, iv and v.
D) ii, iv and vi.
E) v and vi.

Question 19

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. The injured ankle was the proximate cause of A's more serious injury in the automobile accident, because B had hired the taxi to send her to the hospital.

Question 20

Mr. Ma operated a dry-cleaning plant. Even if there was no intention of harming anyone, he could still be sued by someone harmed by dry cleaning chemicals that escaped from his property. This is an example of what principle of tort law?

A) Vicarious liability
B) Contributory negligence
C) False Imprisonment
D) Strict liability
E) Defamation

Question 21

Jacques captured a large rattlesnake while on a camping trip and brought it home to his apartment in the city. He kept the snake in a glass aquarium which he had covered with a wire screen. One day, after feeding the snake, he accidentally failed to fasten down the screen cover, and the snake escaped from the aquarium. The snake managed to enter the adjoining apartment by way of an open balcony door. The occupant of the adjoining apartment was bitten and seriously injured when she accidentally stepped on the snake.
Historically, the courts have imposed strict liability for loss on persons that keep dangerous things on their property. The rattlesnake would probably be classed in such a way by the court.

Question 22

Jacques captured a large rattlesnake while on a camping trip and brought it home to his apartment in the city. He kept the snake in a glass aquarium which he had covered with a wire screen. One day, after feeding the snake, he accidentally failed to fasten down the screen cover, and the snake escaped from the aquarium. The snake managed to enter the adjoining apartment by way of an open balcony door. The occupant of the adjoining apartment was bitten and seriously injured when she accidentally stepped on the snake.
Jacques would probably be strictly liable for any injury caused by the snake, since he should have foreseen the danger associated with keeping a poisonous snake in confinement.

Question 23

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. A was the author of her own misfortune, because she should have foreseen the risk of injury by walking on an icy sidewalk.

Question 24

Sam had a swimming pool in the rear yard of his suburban home. The pool was enclosed on all sides by a 1.2-metre high wire fence, and entry to the pool area was by a gate, which Sam occasionally locked. One day, Sam drained the pool in order to have some repair work done, and accidentally left the gate closed but unlocked. A four-year-old child who lived in the next house to Sam entered the pool area by opening the gate, and was injured when he fell into the empty pool.
Sam is liable for the injury to the child, because he failed to lock the gate that would prevent the child from entering the pool area.

Question 25

Ping drove his automobile into a parking lot and, in doing so, collided with the side of a parked automobile that was owned by Nelson. Ping has a duty not to damage the automobile owned by Nelson.

Question 26

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00.

Question 27

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00.

Question 28

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00

Question 29

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. If A took legal action against B, B might plead volenti non fit injuria as a defence.

Question 30

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00.

Question 31

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. The court would consider what a reasonable person would have done or foreseen in determining the duty of care in this case.

Question 32

Jacques captured a large rattlesnake while on a camping trip and brought it home to his apartment in the city. He kept the snake in a glass aquarium which he had covered with a wire screen. One day, after feeding the snake, he accidentally failed to fasten down the screen cover, and the snake escaped from the aquarium. The snake managed to enter the adjoining apartment by way of an open balcony door. The occupant of the adjoining apartment was bitten and seriously injured when she accidentally stepped on the snake.
The neighbour was careless in leaving her balcony door open, and therefore, Jacques would not be liable for her injury.

Question 33

Sam had a swimming pool in the rear yard of his suburban home. The pool was enclosed on all sides by a 1.2-metre high wire fence, and entry to the pool area was by a gate, which Sam occasionally locked. One day, Sam drained the pool in order to have some repair work done, and accidentally left the gate closed but unlocked. A four-year-old child who lived in the next house to Sam entered the pool area by opening the gate, and was injured when he fell into the empty pool.
Sam is liable for the injury to the child, because he had not warned his neighbours that the pool had been drained of water.

Question 34

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired

Question 35

Sam had a swimming pool in the rear yard of his suburban home. The pool was enclosed on all sides by a 1.2-metre high wire fence, and entry to the pool area was by a gate, which Sam occasionally locked. One day, Sam drained the pool in order to have some repair work done, and accidentally left the gate closed but unlocked. A four-year-old child who lived in the next house to Sam entered the pool area by opening the gate, and was injured when he fell into the empty pool.
The child's parents would be entirely at fault for allowing the child to enter on Sam's property without supervision.

Question 36

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. B has strict liability for any injury to A, because he was the owner of the sidewalk.

Question 37

Jacques captured a large rattlesnake while on a camping trip and brought it home to his apartment in the city. He kept the snake in a glass aquarium which he had covered with a wire screen. One day, after feeding the snake, he accidentally failed to fasten down the screen cover, and the snake escaped from the aquarium. The snake managed to enter the adjoining apartment by way of an open balcony door. The occupant of the adjoining apartment was bitten and seriously injured when she accidentally stepped on the snake.
Jacques would not be liable for the injury to his neighbour, because she was bitten as a result of her own carelessness.

Question 38

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00.

Question 39

On a cold winter day, A slipped on the icy sidewalk at the entrance to B's shop. A injured her ankle as a result of the fall, and B hired a taxi to have her taken to the hospital to have her injured ankle examined. On the way to the hospital another automobile collided with the taxi, and A was seriously injured. B's actions were too remote to be the cause of the automobile accident in which A received serious injuries.

Question 40

A and B entered a variety store owned by
C. A purchased two chocolate bars from C, and gave one to
B. Unknown to A, B, or C the chocolate bar which A gave to B contained a piece of metal that had fallen into the chocolate mix when the candy bar was made. When B attempted to eat the chocolate, she damaged a tooth. She was obliged to have the tooth repaired by a dentist, and in addition lost a day's work because of the painful injury to her mouth. Her total loss amounted to $300.00.

Question 41

A highly corrosive liquid that is stored on the property of Acme Waste Disposal leaks from its container and seeps into the foundations of the business next door, badly damaging the building. Acme will be liable only if the injured party can prove Acme was negligent.

Question 42

The basic premise upon which tort liability is founded is that individuals and corporations living in a civilized society will not (and should not) intentionally cause injury to one another or others' property.

Question 43

Initially, under tort theory, only deliberate, direct injury was open to action, and compensation payable was open to consideration based on the actual loss suffered by the plaintiff.

Question 44

Ping drove his automobile into a parking lot and, in doing so, collided with the side of a parked automobile that was owned by Nelson. Ping would be liable for the damage to Nelson's automobile if Ping was negligent in the operation of his motor vehicle.

Question 45

Marc intends to sue Colleen for negligence. As a general rule, absent any unusual circumstances, Marc will not win unless he can prove to the court on the balance of probabilities that what he alleges about Colleen's actions is true.

Question 46

A defendant can receive damages as a result of a tortious act even though he or she may not have experienced any monetary loss.

Question 47

Dave and Ray are teammates on their city's rugby team. Ray was injured early in the season and is unable to play for the remainder of the year. Dave forgot his mouthguard on the day of a game and borrowed Ray's mouthguard which, although it was medically formed for Ray's mouth, fit Dave fairly well. During a game Dave received a high tackle and lost several of his teeth. His attempt to sue Ray as well as the mouthguard manufacturer will be successful.

Question 48

Dave was injured in a hang-gliding accident at a hang-gliding school and would like to sue the owners of the school. Before they would allow him to take classes, the owners of the school had Dave sign a document which said that the school would not be responsible, legally or physically, for Dave's safety. This kind of document is called a release.

Question 49

Dave was injured in a hang-gliding accident at a hang-gliding school and would like to sue the owners of the school. Before they would allow him to take classes, the owners of the school had Dave sign a document which said that the school would not be responsible, legally or physically, for Dave's safety. This kind of document is called a waiver.

Question 50

Andrew, a newly graduated lawyer, failed to do a proper title search of a property, which resulted in his clients actually owning only two-thirds of the property which they thought they had bought. Andrew will be held to the standard of care expected of the reasonable person.

Question 51

While demolishing a building using a crane and wrecking ball, Thompson, an employee of Bashett's Wrecking Co., accidentally hit Marsden's car, which was parked nearby in a laneway, and totally demolished it. Marsden, who fortunately was not in the car at the time, wishes to sue.
a. Who should Marsden sue and why?
b. If Marsden is successful, against whom will she execute judgement, and why is that permitted and reasonable?

Question 52

Ping drove his automobile into a parking lot and, in doing so, collided with the side of a parked automobile that was owned by Nelson. Because a motor vehicle is a dangerous object, Ping is strictly liable for any damage caused by his vehicle.

Question 53

Manish, a hairdresser, applied too much peroxide to Meagan's hair when he was colouring it, causing it to break off at the roots. Manish will be held to the standard of care of the reasonable hairdresser.

Question 54

James and Mary are artists who have a studio in an industrial part of the city. They decide to live in the studio, which is not against local zoning bylaws, but find themselves disturbed at night by the noise and light from a nearby railway marshalling yard. They decide to institute a nuisance suit against the railway since their enjoyment of their property has been seriously affected. They will be unsuccessful.

Question 55

Seth owns a large plot of land on which he plants pear trees. These pears are his sole income and have earned him a reputation as a premier grower. His neighbour owns two horses which constantly break through the fence separating the two properties and maraud Seth's pear trees, costing him lost profits, decreasing production and causing general damage to the orchard. Seth would have valid grounds for a claim of nuisance.

Question 56

The Sampson Hair Products company is sued by a user who contracted a painful rash from using their shampoo. If Sampson manufactured the product in the same way and to the same standard as a reasonable shampoo manufacturer, and the rash was simply the result of an unusual allergy, Sampson will not be held liable.

Question 57

After winning a lottery, Janice consulted Len, a stockbroker and accountant, about how to invest the huge sum she had won. In their discussion she mentioned that her brother, Steve, would probably ask her for the information and advice she received from Len. "Even though he won as much as I did," she said, "he's too cheap to pay for the help we both know we need, so I better make some notes." Among other things, Len advised Janice to buy shares in a company just before it bought heavily into retail stores in the U.S.A. and became overextended. Janice didn't act on that piece of advice, but Steve did.
a. Discuss whether Steve can bring a suit against Len.
b. If Steve can bring a suit, is he likely to succeed?

Question 58

Arthur, who is a member of the maintenance staff of Gordon's Mall, was mending one of the revolving entry doors when he realised that he was missing an essential tool. He placed an "Out of Order" sign on the door and went to get the tool. Due to an emergency caused by a washroom flood, he was gone for longer than he expected. Not long after he left, the sign fell off the door, and, while Susan, Antoinette and Gloria were entering, the door collapsed, seriously injuring all three women. Susan was on her way to the pet store to buy cat food, Antoinette came to the mall to get decorating ideas from the paint and wallpaper shop, but was not going to buy anything, and Gloria, thinking she was dying, confessed that she was on her way to rob the jewellery store.
a. Who would Susan, Antoinette and Gloria sue and why?
b. Identify what, if any, duty of care is owed to each woman, and discuss whether any of them could win a negligence suit.

Question 59

Teresa is suing the Driver Trucking Co. because she was injured when one of their trucks negligently crashed into the bus shelter in which she was standing. Since Driver Trucking can do nothing to protect itself from its driver's negligence, it is unfair to hold the company liable for its employee's actions.

Question 60

Much attention has been paid to the issue of dog attacks, which remains largely subject to a presumption of strict liability for owners of specific breeds such as pit bulls.

Question 61

In this era of global trade, discuss the legal issues of which both manufacturers and consumers of imported products should be aware.

Question 62

A community ice rink posted a sign at the facility stating that persons using the rink are responsible for damage or any injury which they may incur. While taking a break from a hockey game, Wayne took a seat on the bench. A faulty light used to illuminate the ice surface exploded causing severe burns to Wayne. Using the principles of volenti non fit injuria and res ipsa loquitur discuss the success of Wayne's attempt to sue the community.

Question 63

Fun Unlimited Inc. was a manufacturer of children's toys and games. For the Christmas season it produced and offered for sale through its retail distribution channels a toy clown doll. The doll was made of fabric and wore a colourful clown suit with several large, bright red buttons down the front. Mr. and Mrs. Johnson purchased one of the clowns as a Christmas gift for their two-year-old granddaughter. The child was delighted with the toy and played with it for many hours. About a week after Christmas the child's mother noticed two of the buttons missing from the front of the clown suit. A thorough search of the house did not turn up the buttons. Later that day, as she supervised the child's play, the mother observed the little girl pulling a button off the clown suit and placing it in her mouth. Before she could reach the child to retrieve it, the button had been swallowed. In the several days that followed, the child had little appetite and showed considerable abdominal distension. When the child's mother took her to a doctor, X-rays were performed that showed the buttons were lodged in her upper intestinal tract, blocking her entire digestive system. Immediate surgery was required to remove the buttons. The child required considerable postoperative care at home, resulting in substantial time lost from work for both parents.
a. Discuss the nature of the legal action which may be taken in this case, including the remedies and damages sought. Also discuss any defences that may be raised and render a decision
b. If Fun Unlimited had discovered the ease with which the buttons could be removed by children and had ordered a recall of the product, how would this affect your answer to (a), if at all?

Question 64

Walter, a chartered accountant, provided services to ABC Manufacturing Inc. owned by Mr. White. Walter took care of all of ABC's financing, bookkeeping, payroll management, financial statement preparation and tax planning and preparation. Early in January, White came to Walter to inform him that he was thinking of selling the business. He explained that the slow economy had considerably dampened his sales and that he wished to sell the business as a going concern before the situation became critical and he might be forced to sell at a loss or liquidate assets to satisfy creditors. Walter listened carefully but suggested that White should wait and sell after he prepared some current financial statements from which he could offer some constructive advice about the fortunes of the company. Walter also told White that, based on his understanding of the situation, ABC could easily be restored to financial health. Walter prepared draft statements using certain assumptions about the availability, terms and cost of bridge financing and the reduction in operating expenses that could be achieved by rearranging production in certain ways. The assumptions were not fully explained on the statements as Walter preferred to meet with White and discuss the matter fully. However, a footnote stated that "the figures are based on receipt of interim financing and predicted cost reductions." Walter then sent the statements to White for his review and invited further discussion.
Two weeks later, Walter received a telephone call from White who told him he had sold the business at a substantial profit to Black. The purchaser had been impressed with the financial position of the company based on Walter's most recent statements and had taken the statements to his bank in order to secure a loan for the purchase price. The loan was granted. Within the first six months under Black's ownership, ABC's sales continued to fall. Black's new accountant prepared financial statements that portrayed a much more dismal situation than had Walter's. Within another month, one of ABC's major suppliers forced the company into bankruptcy.
Discuss the liability of the parties in this case, if any, and render a decision.